India highest recipient of remittances

  • 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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