World Bank’s Migration and Remittances Report Highlights India’s Key Role in Global Remittances

World Bank's Migration and Remittances Report Highlights India's Key Role in Global Remittances

VoM News Desk | December 18, 2023 | 12:51 PM IST | Breaking News, World | Follow on Google News

World Bank’s Migration and Remittances Report Highlights India’s Key Role in Global Remittances /ANI

World Bank’s Migration and Remittances Report Highlights India’s Key Role in Global Remittances

The latest Migration and Development Brief from the World Bank brings forth a notable growth trend in remittance flows to low- and middle-income countries (LMICs) during 2023, albeit at a slower rate compared to previous years. India particularly stands out as the leading recipient of remittances, indicating significant changes in the landscape of remittance dynamics.

Reportedly, remittances to LMICs increased by an estimated 3.8 per cent in 2023, amounting to a total of USD 669 billion. The robust labor markets in advanced economies and Gulf Cooperation Council (GCC) nations have played a crucial role in enabling migrants to support their families back home.

However, the report raises concerns about the potential impact of global inflation and limited growth prospects in 2024, which may affect the real income of migrants. Despite this, remittance flows to India and the South Asian region exhibited notable growth, contributing to the overall positive trend. South Asia observed a 7.2 per cent increase in remittances in 2023, with India receiving a noteworthy USD 125 billion.

Nonetheless, challenges persist. The Middle East and North Africa witnessed a decline in remittance flows for the second consecutive year, primarily due to decreased flows to Egypt. Europe and Central Asia also experienced a 1.4 per cent decrease in remittances following significant gains in 2022.

India maintained its position as the foremost recipient of remittances, further highlighting the Indian diaspora’s vital role in bolstering the nation’s economy. The top five recipients included Mexico, China, the Philippines, and Egypt.

The report underscores the potential impact of global economic conditions on remittance flows, expecting a 3.1 per cent increase in 2024, tempered by weaker economic activities in high-income countries and softer job markets. Persistent high remittance costs, averaging 6.2 per cent to send USD 200, remain a concern, particularly with banks recording the highest average cost of 12.1 per cent.

Highlighting the significance of remittances for development finance, the report advocates for leveraging diaspora bonds as a stable funding source. It notes that remittances have surpassed foreign direct investment and official development assistance, offering opportunities for private capital mobilization.

India’s prominent position in global remittances underscores the vital role played by the Indian diaspora. The report stresses inclusive labor markets and social protection policies to sustain remittance flows, crucial lifelines for developing countries like India amid persisting challenges and risks.

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