Novel real remittance outflow indicator and its dynamic relationship with macroeconomic indicators in GCC

This study introduces a new remittance outflow indicator, the Real Remittance Indicator (RRI), which accounts for inflation and transaction costs. It examines the dynamics of real and nominal remittance outflows in GCC countries, emphasising the need for accurate economic analysis. Using a t-test and a panel ARDL model with dynamic fixed effects, the study analyzes the relationship between remittance outflows and macroeconomic indicators. Key findings show a significant positive correlation between RRI and GDP, and a negative correlation with Foreign Direct Investment (FDI). Unit root tests indicate RRI and NRI become stationary after first differencing. The panel ARDL results highlight a positive long-term impact of GDP on RRI and a negative impact of FDI. The study suggests that GCC policymakers should improve economic stability and job security for expatriates, lower transaction fees, and promote digital remittance methods to enhance remittance outflows.