The World Bank has said that remittance inflows has been around US$39mn since 1986 and this is the first time it is expected to touch US$40mn. In its latest edition of ‘Migration and Development Brief’, the World Bank has said that remittances to low- and middle-income countries are on course to recover this year after two consecutive years of decline.
The bank estimates that officially recorded remittances to developing countries are expected to grow by 4.8 per cent to US$450bn for 2017. Remittances to high-income countries, are projected to grow by 3.9 per cent to US$596bn.
The recovery in remittance flows is driven by relatively stronger growth in the European Union, Russian Federation, and the US. As a result, the regions likely to see the strongest growth in remittance inflows this year are Sub-Saharan Africa, Europe and Central Asia, and Latin America and the Caribbean.
In the GCC, fiscal tightening, due to low oil prices, and policies discouraging recruitment of foreign workers, will dampen remittance flows to East and South Asia. Among major remittance recipients, India retains its top spot, with remittances expected to total US$65bn this year, followed by China (US$61bn), the Philippines (US$33bn), Mexico (a record US$31bn), and Nigeria (US$22bn). In keeping with an improving global economy, remittances to low- and middle-income countries are expected to grow modestly by 3.5 per cent in 2018, to US$466bn. Global remittances will grow by 3.4 per cent to US$616bn in 2018.
“Remittances are a lifeline for developing countries. This is particularly true following natural disasters, such as the recent earthquakes in Mexico and the storms devastating the Caribbean. It is imperative for the global community to reduce the cost of remitting money, by eliminating exclusivity contracts, especially in the high-income OECD (Organisation for Economic Development and Cooperation) countries. There is also an urgent need to address de-risking behaviour of global banks,” said Dilip Ratha, lead author of the brief and head of Global Knowledge Partnership on Migration and Development.