According to the World Bank (WB)’s latest data, India has emerged as the topmost recipient of remittances among Low and Middle-Income Countries (LMICs) in 2024, with an estimated inflow of USD 129 billion, witnessed an increase of 3.2% compared to USD 125 billion in 2023.
- India is followed by Mexico (USD 68 billion), China (USD 48 billion), the Philippines (USD 40 billion), and Pakistan (USD 33 billion). This surge is mainly attributed to a recovery in the job markets in High-Income Countries (HICs) within the Organisation for Economic Co-operation and Development (OECD).
- As per the data, remittance inflows globally increased by 5.8% in 2024 compared to modest growth of 1.2% registered in 2023.
Key Findings:
i.The report highlighted that officially recorded remittances to LMICs are projected to reach USD 685 billion in 2024.
ii.The report noted that remittance inflows account very large percentage of Gross Domestic Product (GDP) in smaller economies like: Tajikistan (45% of GDP), followed by Tonga (38.2%), Nicaragua (27.2%), Lebanon (26.6%), and Samoa (25.9%), among others, highlighting the significance of remittances for funding the current account and shortfalls.
iii.The report underscored that remittances have continued to outpace other types of external financial flows to LMICs and will continue to increase due to huge migration pressures driven by demographic trends, income disparities, and climate change.
iv.As per the report, the gap between remittances and Foreign Direct Investment (FDI)Â is estimated to widen further in 2024.
- The report highlighted that over the last 10 years, remittances have increased by 57%, while FDI decreased by 41%.
v.Other than strong job market in the United States of America (USA), remittances are expected to to continue to flow to Mexico and Guatemala in part due to large of transit migrants passing through these countries, specifically, from Cuba, China, Ecuador, Haiti, India, Nicaragua, and Venezuela, as per the data from the US Customs, Border and Protection.
vi.The report also underscores the need for continued policy efforts to reduce the cost of remittances, which currently stands at an average of 6%.
- The United Nations(UN’s)’ Sustainable Development Goal(SDG) 10 aims to lower this cost to 3% by 2030.
Region-wise:
i.South Asia region is projected to register the highest increase in terms of remittance flows i.e. at 11.8% in 2024 (compared to increase of 5.1% in 2023). This growth is driven mainly by continued strong flows to India, Pakistan, and Bangladesh.
- The Middle East and Africa region is projected to witness a growth of 5.4% remittances in 2024, mainly due to rebounded flows to Egypt, compared with a decrease of 14.6% in 2023 and Sub-Saharan Africa is expected to register a growth of 2.4% in 2024.
ii.While, most of the regions are expected to witness growth in remittance flows compared to last year, except: Latin America and the Caribbean region is estimated to slow to 5.5% (in 2024), from 7.5% (in 2023).
- Similarly, East Asia and the Pacific region (excluding China)Â expected to see a decline from 5.2% (in 2023) to 3.3% (in 2024).
iii.The report has projected that Europe and Central Asia are expected to witness an increase in remittances by 3% in 2024 compared to 8.7% decrease registered in 2023.
Recent Related News:
On October 10 2024, the World Bank released a report titled “South Asia Development October 2024 Update: Women, Jobs and Growth”. It has retained India’s Gross Domestic Product (GDP) growth forecast for Financial Year 2024-25 (FY25) to 7% Year-on-Year (Y-o-Y). This growth projection is mainly attributed by higher agricultural production and robust employment growth from policy initiatives, which further boosting the private consumption.
- The World Bank has also retained India’s GDP growth forecast at 6.7% for FY26 (2025-26).
About World Bank (WB):
President- Ajay Banga
Headquarters- Washington, DC, the United States of America (USA)
Established- 1944
