On June 26, 2024, the World Bank (WB) released a report titled ‘Migration and Development Brief 40 June 2024: Remittances Slowed in 2023,Expected to Grow Faster in 2024‘. As per it, India received USD 120 billion in remittances in 2023, a 7.5% increase.
- The reason behind this increase is lower inflation and strong labor markets in the United States of America (USA) and Europe.
- Remittances to India are forecasted to grow 3.7% to USD 124 billion in 2024 and 4% to USD 129 billion in 2025.
Top Five Recipient Countries for Remittances in 2023
| Rank | Country | Estimated Inflow (USD Billion) |
|---|---|---|
| 1 | India | 120 |
| 2 | Mexico | 66 |
| 3 | China | 50 |
| 4 | Philippines | 39 |
| 5 | Pakistan | 27 |
Highlights:
i.Tonga (41% of GDP), Tajikistan (39%), and Lebanon (31%) top the list in smaller economies.
ii.Top Destination Countries: The USA, Germany, Saudi Arabia, Russia, and the United Kingdom (UK).
iii.Largest Origin Countries: India (18.7 million emigrants), Ukraine (11.9 million), China (11.1 million), Mexico (11 million), and Venezuela (8.9 million).
iv.Largest Migration Corridor is Mexico to USA, followed by Ukraine to Russia, and Afghanistan to the Islamic Republic of Iran.
v.Remittances from the United Arab Emirates (UAE), accounted for 18% of India’s remittances, the second-largest source of India’s remittances after the USA.
vi.India’s efforts to link its Unified Payments Interface (UPI) with countries like the UAE and Singapore aims to reduce costs and speed up remittances.
Assessment:
The report, produced under the Global Knowledge Partnership on Migration and Development (KNOMAD) does not necessarily represent the views of the WB. Its lead author was Dilip Ratha, Lead Economist and Economic Adviser to the Vice President of Operations at the Multilateral Investment Guarantee Agency (MIGA), WB.
Overall Scenario:
i.Remittance flows to Low-and Middle-Income Countries (LMICs) moderated in 2023, reaching an estimated USD 656 billion. These are expected to grow by 2.3% in 2024, with uneven growth across regions.
ii.In 2023, remittances surpassed Foreign Direct Investment (FDI) and Official Development Assistance (ODA).
iii.Remittance flows in 2023, increased most to Latin America and the Caribbean (7.7%), followed by South Asia (5.2%), and East Asia and Pacific (4.8%, excluding China).
- Remittances to South Asia reached USD186 billion (driven by India). However the percentage increase was down from a 12% increase in 2022.
iv.Sub-Saharan Africa saw a slight decline of 0.3%, the Middle East and North Africa experienced a nearly 15% drop, and Europe and Central Asia saw a 10.3% fall.
Cost of Remittances:
i.Sending remittances remains costly, with the global average cost of sending USD 200 at 6.4% in Q4 2023, up from 6.2% in Q42022, and above the Sustainable Development Goal (SDG) of 3%.
ii.Digital remittances cost 5%, compared to 7% for non-digital methods, showing the benefits of technology in reducing costs for migrants.
Recent Related News:
i.On April 2, 2024, the World Bank (WB) in its South Asia Development Update April 2024- Jobs for Resilience projected Indian economy to grow at 7.5% in 2024, a revision of 1.2% from 6.3% estimated in October 2023 report.
ii.The Government of Goa has announced a partnership with the World Bank (WB) to establish a Blended Finance Facility (BFF) for climate resilience. This initiative aims to access and mobilise concessional finance to implement low-carbon and climate-resilient investment in Goa.
About World Bank (WB):
President– Ajay Banga
Headquarters– Washington, DC, the USA
Establishment– 1944
