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Despite a severe global recession, remittances flowing to low-and middle-income- countries (LMICs) are predicted to increase by 4.2 percent this year to reach 630 billion. The World Bank stated in its latest Migration and Development Brief on Wednesday (May 11), that this follows an almost record rebound of 8.6 percent in 2021.
According to the World Bank, remittance inflows will increase significantly in Latin America and the Caribbean (25.3 %), Sub-Saharan Africa (14.1 %), Europe and Central Asia (7.8 %), the Middle East and North Africa (7.6 %), and South Asia (7.6 %) in 2021. (6.9 %). Remittances to East Asia and the Pacific declined by 3.3%, although excluding China, remittances increased by 2.5%.
Summary from the World Bank Report:
- Remittances to East Asia and the Pacific dropped 3.3% in 2021. In 2021 flow levels were similar to 2017. Remittances rose 2.5% in 2021 without China.
- In 2021, remittances to Europe and Central Asia reached a record of $74 billion. Stronger EU economic activity and rising energy costs drove the growth. In 2021, Poland, the top destination for Ukrainian migrant workers, sent $18.2 billion to Ukraine.
- Due to the robust economic recovery for foreign-born workers in the U.S., remittances to Latin America and the Caribbean soared to $131 billion in 2021. Guatemala (35%), Ecuador (31%), Honduras (29%), Mexico (25%), El Salvador (26%), Dominican Republic (26%), Colombia (24%), Haiti (21%), and Nicaragua registered a double-digit increase (16%). Honduras, El Salvador, Guatemala, Haiti, Venezuela, Cuba, and others have sent money to Mexico.
- Remittances to emerging Middle East and North African nations climbed 7.6% to $61 billion in 2021, led by Morocco (40%) and Egypt (6.4%). Economic development in EU host nations and transit migration have boosted inflows to Egypt, Morocco, and Tunisia. Remittances may rise 6% in 2022.
- In 2021, South Asian remittances climbed 6.9% to $157 billion. Vaccines and the liberalization of Gulf Cooperation Council economies allowed a gradual return to host nations in 2021, encouraging bigger remittance flows. Better U.S. economic performance boosted 2021 growth. India and Pakistan had 8% and 20% growth in remittances. In 2022, remittance inflows will climb 4.4%. In 2021, remittances will be more than three times as large as FDI. South Asia has the lowest average remittance cost in the world, yet it’s still over the SDG objective of 3%.
- Sub-Saharan Africa received $49 billion in remittances in 2021, up 14.1% from the previous year. Strong European and U.S. economic growth boosted remittances. Recorded inflows to Nigeria, the region’s largest recipient, rose 11.2% due to initiatives to channel inflows via the banking sector. Cabo Verde, Gambia, and Kenya have double-digit growth rates (20.1 %). Gambia (27%), Lesotho (23%), Comoros (19%), and Cabo Verde have high remittance shares of GDP (16 %)
In 2021, the top five recipient nations for remittances will be India, Mexico (which will replace China), China, the Philippines, and Egypt. As a percentage of GDP, Lebanon (54 %), Tonga (44 %), Tajikistan (34%), Kyrgyzstan (33%), and Samoa are among the economies with exceptionally high remittance inflows as a percentage of GDP (32 %).