Remittances to low- and middle-income countries increased by nearly 5 per cent to USD 626 billion in 2022, roughly half the growth seen last year and change is expected to slow further to around 2 per cent next year, according to the World Bank.
Remittances are an important source of household income for people in low and middle-income countries, contributing to poverty alleviation and resilience while increasing infant birth weight and school enrollment rates for older children.
Officially recorded remittances increased in 2022 as host economies reopened and employment increased as the Covid-19 pandemic receded. Still, rising prices harmed migrants’ real incomes, according to the World Bank's latest Migration and Development Brief.
It noted that the strong growth rate forecast for 2022 was notable given that it followed a 10.2 per cent increase in 2021.
According to the report, global remittance flows, including advanced economies are expected to reach USD 794 billion in 2022.
The rise in the value of the Russian rouble following the outbreak of the Ukrainian conflict resulted in higher outward remittances from Russia to Central Asia. At the same time, the weaker euro reduced the value of remittances to North Africa and elsewhere, according to the bank.
It predicted that remittance growth would slow further in 2023 as high-income countries’ GDP growth slowed further.
“Downside risks remain substantial, including a worsening of the war in Ukraine, volatile oil prices and currency exchange rates and a deeper-than-expected downturn in major high-income countries,” according to the report.
According to the report, the top five recipient countries for remittances in 2022 are expected to be India with a new benchmark of USD 100 billion, Mexico with USD 60 billion, China, the Philippines and Egypt.
Climate change pressures were expected to increase intra-country migration and impair livelihoods.
As a result, the report said that changes in international legal norms and institutional frameworks for cross-border migration might be required to meet the challenge of climate-rated migration.