Remittances to South Asia are projected to increase by 13.5 percent to $132 billion in 2018, a stronger pace than the 5.7 percent growth seen in 2017, says the latest edition of the World Bank’s Migration and Development Brief.
The upsurge is driven by stronger economic conditions in advanced economies, particularly the United States, and the increase in oil prices have a positive impact on outflows from some GCC countries, such as the United Arab Emirates has reported a 13 percent growth in outflows for the first half of 2018. Bangladesh and Pakistan experienced upticks of 17.9 percent and 6.2 percent in 2018, respectively.
For 2019, it is projected that remittance growth for the region will slow to 4.3 percent due to a moderation of growth in advanced economies, lower migration to the GCC and the benefits from the oil price spurt dissipating.
Remittances to low and middle-income countries grew rapidly and are projected to reach a new record in 2018, World Bank estimates that officially recorded remittances to developing countries will increase by 10.8 percent to reach $528 billion in 2018. This new record level follows a robust growth of 7.8 percent in 2017. Global remittances, which include flows to high-income countries, are projected to grow by 10.3 percent to $689 billion.
Remittance flows rose in all regions, most notably in Europe and Central Asia (20 percent) and South Asia (13.5 percent), followed by Sub-Saharan Africa (9.8 percent), Latin America and the Caribbean (9.3 percent), the Middle East and North Africa (9.1 percent), and East Asia and the Pacific (6.6 percent). The growth was driven by a stronger economy and employment situation in the United States and a rebound in outward flows from the Gulf Cooperation Council (GCC) countries and the Russian Federation.
Among major remittance recipients, India retains its top spot, with remittances expected to total $80 billion this year, followed by China ($67 billion), Mexico and the Philippines ($34 billion each), and Egypt ($26 billion).
As global growth is projected to moderate, future remittances to low and middle-income countries are expected to grow moderately by 4 percent to reach $549 billion in 2019. Global remittances are expected to grow 3.7 percent to $715 billion in 2019.
The brief notes that the global average cost of sending $200 remains high at 6.9 percent in the third quarter of 2018.
Reducing remittance costs to 3 percent by 2030 is a global target under Sustainable Development Goal (SDG) 10.7. Increasing the volume of remittances is also a global goal under the proposals for raising financing for the SDGs.