India retained the top position as a recipient of remittances with its diaspora sending about $69 billion back home last year, the World Bank said on Monday.
Remittances to India picked up sharply by 9.9%, reversing the previous year’s dip, but were still short of $70.4 billion received in 2014.
In its latest Migration and Development Brief, the World Bank estimated that officially recorded remittances to low-and middle-income countries reached $466 billion in 2017. This was an increase of 8.5% over $429 billion in 2016.
Global remittances, which include flows to high-income countries, grew 7 per cent to USD 613 billion last year, from USD 573 billion in 2016, the bank said.
The stronger-than-expected recovery in remittances was driven by growth in Europe, Russia and the U.S.
The rebound in remittances, when valued in U.S. dollars, was helped by higher oil prices and a strengthening of the Euro and the Ruble, it added.
India continued to top in terms of receiving remittance, and was followed by China ($64 billion), the Philippines ($33 billion), Mexico ($31 billion), Nigeria ($22 billion) and Egypt ($20 billion).
The Bank said remittances to South Asia grew a moderate 5.8% to $117 billion.
Reversing the previous year’s sharp decline (8.9% in 2016), remittances to India in 2017 picked up by 9.9%, the Bank said. As against $62.7 billion in 2016, it received $69 billion last year.
‘Upsurge to continue’
The upsurge is likely to continue into 2018 on the back of stronger economic conditions in advanced economies (particularly the U.S.) and an increase in oil prices that should have a positive impact on the GCC countries.
However, flows to Pakistan and Bangladesh were both largely flat in 2017, while Sri Lanka saw a small decline (-0.9%).
In 2018, remittances to the region will likely grow modestly by 2.5%to $120 billion.
Global remittances are expected to grow 4.6% to $642 billion in 2018.
The Bank said the global average cost of sending $200 was 7.1% in Q1 of 2018, more than twice as high as the Sustainable Development Goal target of 3%.
Sub-Saharan Africa remains the most expensive place to send money to, where the average cost is 9.4%.
Barriers to reducing costs are derisking by banks and exclusive partnerships between national post office systems and money transfer operators.
These factors constrain the introduction of technologies, such as mobile apps and the use of cryptocurrency and blockchain in remittance services.
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