Following India were Mexico (USD 67 billion), China (USD 50 billion), the Philippines (USD 40 billion), and Egypt (USD 24 billion).
In 2023, India recorded the highest global remittance inflow at USD 125 billion. The World Bank attributed this to various factors, such as India's agreement with the UAE to encourage the use of dirhams and rupees for bilateral trade.
According to a report by the World Bank, the projected growth in remittances for India is anticipated to decrease by half, dropping to 12.4 percent in 2023 from its historical peak of 24.4 percent in 2022.
The World Bank's latest Migration and Development Brief stated, "Remittances are projected to increase by USD 14 billion, reaching USD 125 billion in 2023, thereby elevating India's share in South Asian remittances from 63 percent in 2022 to 66 percent in 2023."
Following India, the top recipients of remittances were Mexico (USD 67 billion), China (USD 50 billion), the Philippines (USD 40 billion), and Egypt (USD 24 billion).
Economies where remittance inflows constitute significant proportions of Gross Domestic Product (GDP), underscoring their importance in addressing current account and fiscal shortfalls, include Tajikistan (48 percent), Tonga (41 percent), Samoa (32 percent), Lebanon (28 percent), and Nicaragua (27 percent).
According to the World Bank, in the case of India, the primary contributing factors include a decrease in inflation and robust labor markets in high-income source countries. These factors have led to increased remittances from highly skilled Indians in the US, the UK, and Singapore, collectively representing 36 percent of the total remittance flows to New Delhi.
The report also highlighted that remittance flows to India received a boost from higher flows from the Gulf Cooperation Council (GCC), particularly the UAE, which contributes 18 percent to India's total remittances and stands as the second-largest source after the US.
Additionally, the report emphasized that the remittance flows to India were particularly advantageous due to the February 2023 agreement with the UAE. This agreement established a framework to encourage the use of local currencies for cross-border transactions and fostered cooperation in interlinking payment and messaging systems.
Facilitating the use of dirhams and rupees in cross-border transactions will play a crucial role in directing a higher volume of remittances through formal channels, according to the report.
In 2023, remittances to low- and middle-income countries experienced an estimated growth of 3.8 percent, marking a slowdown from the substantial gains observed in the preceding two years.
The report also expressed concern about the potential for a decline in real income for migrants in 2024, citing global inflation and low growth prospects as contributing factors.
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