Remittances to slow as economy in source countries soften: World Bank

By Ovunc Kutlu

ISTANBUL (AA) - Remittances remain resilient but likely to slow as economic activity in remittance source countries is set to soften, limiting employment and wage gains for migrants, the World Bank said in its latest Migration and Development Brief report released Tuesday.

Officially recorded remittance flows to low- and middle-income countries are estimated to grow 1.4% to $656 billion in 2023.

In 2022, remittance flows annually increased 8% to $647 billion, growing 0.7% in East Asia and the Pacific, 19% in Europe and Central Asia, 11.3% in Latin America and the Caribbean, 12.2% in South Asia and 6.1% in sub-Saharan Africa.

Remittance inflows last year, however, fell 3.8% for the Middle East and North Africa region, according to the report.

The top three recipient countries for remittances in 2022 were India with $111 billion and Mexico at $61 billion, followed by China at $51 billion.

The World Bank said slower economic growth and falling foreign direct investments in the aftermath of the coronavirus pandemic, remittance inflows have become more important to households as a source of external financing, particularly in low- and middle-income countries with high external debt.

“Remittances are highly complementary to government cash transfers and essential to households during times of need,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.