India is poised to become the top recipient of remittances globally in 2023, with an expected surge of over 11%, reaching $125 billion, according to the World Bank’s Migration and Development Brief. This growth solidifies India’s position ahead of countries like Mexico ($67 billion) and China ($50 billion). The report emphasizes the significance of remittances to India’s economy, helping offset the impact of declining foreign direct investment and higher trade deficits.
Globally, there is an anticipated growth of approximately 3.8% in remittances to low- and middle-income countries (LMICs) in 2023, totaling $669 billion. Resilient labour markets in advanced economies and Gulf Cooperation Council (GCC) countries contribute to migrants’ ability to send money home. However, the World Bank expresses concern about the risk of a decline in real income for migrants in 2024, given the backdrop of global inflation and low growth prospects.
Remittances to South Asia are estimated to grow by 7.2% in 2023, reaching $189 billion, primarily driven by remittances to India. The United States remains the largest source of remittances globally, with Saudi Arabia ranking second. Factors contributing to India’s robust remittance growth include declining inflation and strong labour markets in high-income source countries, particularly the US, UK, and Singapore.
The regional breakdown reveals varied trends, with remittances growing for Latin America and the Caribbean (8%), East Asia and the Pacific (3%), and Sub-Saharan Africa (1.9%). However, flows to the Middle East and North Africa experienced a 5.3% decline for the second consecutive year, primarily attributed to a sharp drop in flows to Egypt. Remittances to Europe and Central Asia also saw a dip of 1.4% after substantial gains in 2022.
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