Remittance flows to the developing world are expected to exceed earlier estimates and total USD 406 billion this year, an increase of 6.5% over the previous year, according to a new World Bank brief on global migration and remittances.
The top recipients of officially recorded remittances for 2012 are India (USD 70 billion), China (USD 66 billion), the Philippines and Mexico (USD 24 billion each), and Nigeria (USD 21 billion). Other large recipients include Egypt, Pakistan, Bangladesh, Vietnam, and Lebanon.
Remittances to developing countries are projected to grow by 7.9% in 2013, 10.1% in 2014 and 10.7% in 2015 to reach USD 534 billion in 2015.
Worldwide remittances, including those to high-income countries, are expected to total USD 534 billion in 2012, and projected to grow to USD 685 billion in 2015, according to the latest issue of the Bank's Migration and Development Brief report.
However, despite the growth in remittance flows overall to developing countries, the continuing global economic crisis is dampening remittance flows to some regions, with Europe and Central Asia and Sub-Saharan Africa especially affected, while South Asia and the Middle East and North Africa (MENA) are expected to fare much better than previously estimate.
''Although migrant workers are, to a large extent, adversely affected by the slow growth in the global economy, remittance volumes have remained remarkably resilient, providing a vital lifeline to not only poor families but a steady and reliable source of foreign currency in many poor remittances recipient countries,'' said Hans Timmer, Director of the Bank’s Development Prospects Group.
Regions and countries with large numbers of migrants in oil exporting countries continue to see robust growth in inward remittance flows, compared with those whose migrant workers are largely concentrated in the advanced economies, especially Western Europe.
Thus, South Asia, MENA and East Asia and Pacific regions, with large numbers of workers in the Gulf Cooperation Council (GCC) countries, are seeing better-than-expected growth in remittances.
For South Asia, remittances in 2012 are expected to total USD 109 billion, an increase of 12.5% over 2011; East Asia and Pacific region, is estimated to attract USD 114 billion, an increase of 7.2% over 2011; while MENA is expected to receive USD 47 billion, an increase of 8.4% over the previous year.
Remittances to Latin America and the Caribbean are supported by a recovering economy and an improving labor market in the United States but moderated by a weak European economy. The region will, thus, see a modest growth of 2.9% in 2012, totaling an estimated USD 64 billion.
In contrast, remittances are expected to remain flat to Europe and Central Asia and Sub-Saharan Africa regions, mainly because of the economic contractions in high-income European countries. Remittance flows to Europe and Central Asia are estimated at a virtually unchanged USD 41 billion and USD 31 billion to Sub-Saharan Africa this year, although both regions are projected to make a robust recovery in remittance flows in 2013.
Going forward, the Bank expects continued growth in remittance flows to all regions of the world, although persistent unemployment in Europe and hardening attitudes towards migrant workers in some places present serious downside risks.
Another obstacle to growth of remittance flows is the high cost of sending money, which averaged 7.5% in the third quarter of 2012 for the top 20 bilateral remittance corridors and 9% for all countries for which cost data are available. The average remittance cost for Sub-Saharan Africa was 12.4%, the highest amongst all developing regions.