With Sanket and K.M. Vijayalakshmi
Newly available monthly and annual data show that remittance flows to developing countries reached $305 billion in 2008 compared to a revised $281 billion in 2007 (see table 1 below, click here for the Excel spreadsheet). The revised estimates translate into a 23 percent growth in 2007, and a 9 percent increase in 2008. While there is a significant deceleration in the growth of remittances in 2008 compared to the previous year, both the levels and growth rates in 2007 and 2008 are higher than previously estimated (more in our Migration and Development Brief 8).
Note that this round of data release reflects more or less final data for 2007, but data for 2008 are still estimates that will be subject to another round of revision in late Spring or early summer.
We are currently revising our forecasts for 2009-10 in light of the latest data revision. We hope to issue a Migration and Development Brief summarizing our outlook shortly, for sure in the next couple of weeks.
The countries with significant data revisions include the three largest recipients: India, China and Mexico. Remittance flows to India are conservatively estimated to have reached $45 billion in 2008 (compared to earlier estimates of $30 billion). Remittance flows to China were about $35 billion in 2008, some $8 billion higher than previously estimated, and those to Mexico about $2 billion higher.
The figure for India now corresponds closely with those of the country’s central bank, with some adjustment for reporting by fiscal year instead of calendar year. The revision increases the share of India’s contribution to South Asia’s remittance inflows to 68 percent, up from 59 percent earlier. The revisions to Mexico’s data, according to the Mexican central bank, were due to inclusion of additional intermediaries (banks, money transfer companies etc.). The new figure for China reflects the latest available data from the World Bank’s country desk.
Remittances data for several other countries that have reported monthly data until end-2008—Bangladesh, Dominican Republic, El Salvador, Honduras, Guatemala, Jamaica, Pakistan, and the Philippines—were also revised to include the latest available figures from the respective central banks. These figures, however, are very close to those estimated earlier as reported in our earlier post. The revisions for this set of countries do not affect the global or regional trends for 2008.
After the latest revisions, India, China and Mexico retain their position as the top recipients of migrant remittances among developing countries. The top 10 recipients list also includes Philippines, Poland, Nigeria, Romania, Egypt, Bangladesh and Pakistan. In contrast, the top recipients in terms of the share of remittances in GDP included many smaller economies such as Tajikistan (45 percent), Moldova (38 percent), Tonga (35 percent), Lesotho (29 percent), and Honduras (25 percent).
Figure 1: Top recipients of migrant remittances among developing countries
After the revisions, the East Asia and Pacific region continues to remain the largest recipient of migrant remittances among all developing regions. South Asia is now the second largest recipient among developing regions, slightly ahead of the Latin America and the Caribbean region. Sub-Saharan Africa continues to remain the smallest recipient among developing regions.
The new estimates show that all the developing regions except South Asia experienced sharp deceleration in the growth of remittance inflows in 2008. Flows to the Latin America and the Caribbean region were flat in 2008, continuing the declining trend in growth since 2006. The growth of inflows to developing countries in Europe and Central Asia decreased from 31 percent in 2007 to 5 percent in 2008, those to East Asia and the Pacific declined from 23 percent to 7 percent, to the Middle East and North Africa from 22 percent to 8 percent, and to Sub-Saharan Africa from 44 percent to 6 percent. Flows to South Asia grew 27 percent in 2008, down only modestly from 31 percent growth registered in 2007.
Table 1: Remittance flow to developing countries, 2002-2008
e = estimate
Source: Authors’ calculation based on data from IMF Balance of Payments Statistics Yearbook 2008 and data releases from central banks, national statistical agencies, and World Bank country desks. Remittances are defined as the sum of workers’ remittances, compensation of employees, and migrant transfers – see www.worldbank.org/prospects/migrationandremittances for data definitions and the entire dataset.
* Including the revision to Nigeria data in 2007. Excluding that, remittance flows to Sub-Saharan Africa would have experienced a more modest growth rate of 14.4 percent, and to developing countries, 22 percent in 2007.