Remittances to low- and middle-income countries (LMICs) grew “an estimated 3.8% in 2023, a moderation from the high gains of the previous two years.”
Of concern is the risk of “decline in real income for migrants in 2024 in the face of global inflation and low growth prospects,” according to the World Bank’s latest Migration and Development Brief released today.
In 2023, remittance flows to LMICs are “estimated to have reached $669 billion as resilient labor markets in advanced economies and Gulf Cooperation Council (GCC) countries continue supporting migrants’ ability to send money home.”
By region, remittance inflows grew “for Latin America and the Caribbean (8%), South Asia (7.2%), East Asia” and other regions.
Flows to the MENA region fell “for the second year, declining by 5.3% mainly due to a sharp drop in flows to Egypt. Remittances to Europe and Central Asia also fell by 1.4% after gaining more than 18% in 2022.”
The United States continued “to be the largest source of remittances. The top five remittance recipient countries in 2023 are India ($125 billion), Mexico ($67 billion), China ($50 billion), the Philippines ($40 billion), and Egypt ($24 billion).”
Based on the trajectory of weaker global economic activity, “growth of remittances to LMICs is expected to soften further to 3.1% in 2024.”
Driving the moderated forecast are “a slowing economic growth and the prospect of weaker job markets in several high-income countries. Additional downside risks include volatile oil prices and currency exchange rates, and a deeper-than-expected economic downturn in high-income countries.”
Iffath Sharif, Global Director of the Social Protection and Jobs Global Practice at the World Bank, said:
“During crises, migrants have weathered risks and shown resilience to support families back home. But high inflation and subdued global growth is affecting how much money they can send. Labor markets and social protection policies in host countries should be inclusive of migrants, whose remittances serve as a vital lifeline for developing countries.”
According to the Bank’s Remittances Prices Worldwide Database, remittance costs remain persistently high, “costing 6.2% on average to send $200 as of the second quarter of 2023.”
Dilip Ratha, lead economist and lead author of the report, said:
“Remittances are one of the few sources of private external finance that are expected to continue to grow in the coming decade. They must be leveraged for private capital mobilization to support development finance, especially via diaspora bonds. Remittance flows to developing countries have surpassed the sum of foreign direct investment and official development assistance in recent years, and the gap is increasing.”
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