After two consecutive years of decline, remittances to low- and middle-income countries is set to recover in 2017, according to a World Bank report.
The latest edition of the World Bank’s Migration and Development Brief estimates that remittances to developing nations are expected to rise by 4.8% to $450bn in 2017. Global remittances, which cover flows to high-income countries, are expected to rise by 3.9% to $596bn.
The report says that the recovery in remittance flows is driven by relatively stronger growth in the European Union, Russian Federation, and the US. Sub-Saharan Africa, Europe and Central Asia, and Latin America and the Caribbean are the regions that are likely to register the strongest growth in remittance inflows this year.
India is expected to retain its spot as top remittances receiving country, with remittances of $65bn in 2017, followed by China ($63bn), the Philippines ($33bn), Mexico ($31bn), and Nigeria (($22bn).
The report added that remittances to low- and middle-income countries are expected to rise by 3.5% in 2018, to $466bn, while global remittances is expected to rise by 3.4% to $616bn next year.
The report noted that global average cost of transferring $200m remained stagnant at 7.2% during the third quarter of 2017.
Dilip Ratha, lead author of the Brief and head of KNOMAD, said: “Remittances are a lifeline for developing countries; this is particularly true following natural disasters, such as the recent earthquakes in Mexico and the storms devastating the Caribbean. It is imperative for the global community to reduce the cost of remitting money, by eliminating exclusivity contracts, especially in the high-income OECD countries. There is also an urgent need to address de-risking behavior of global banks.”