Improving data on remittances: REMITSTAT

Today, as we mark the International Day of Family Remittances, it is important to outline the importance of remittance data. The growing importance of remittances has spurred efforts to improve the timeliness and consistency of data, the main goal of the International Working Group on Improving Data on Remittance Flows (RemitStat). With the participation of over 45 countries, Eurostat, the International Monetary Fund (IMF), and the World Bank, the Working Group has been looking into the challenges of compiling accurate remittance statistics, especially given the rise in new instruments and channels. The COVID-19 pandemic has exposed major gaps in the timely availability of data on remittance flows. The lack of data often results in a blind spot for regulators and authorities, especially while tracking cross-border payments and remittances as well as for investors. High-frequency data are not available for many countries. In some of the largest recipient countries, data are published with a lag of nearly two quarters. 

While quality and accuracy of data have implications not only on the assessment of debt and financial stability of a country, they are also crucial for the global payments industry. The latest available data shows that the cost of sending remittances to developing regions remains high, at  6.2 percent in 2023—more than twice the Sustainable Development Goal target of 3 percent by 2030. Average cost is the highest in Sub-Saharan Africa (7.9 percent) and the lowest in South Asia (4.3 percent). 

A prerequisite for improving remittance data is a proper application of the definitions, understanding of transmission channels, and the regulatory environment affecting the volume, frequency, and transaction modes of remittances. 

The RemitStat group has been working to reduce data asymmetries by (a) monitoring progress in the implementation of the remittance data compilation guidelines by BPM6; (b) improving the timeliness and granularity of the remittances data (frequency, corridors, channels, types of senders and recipients); (c) guiding to regulate cross- country and time series comparability of remittances inflows and outflows; and (d) facilitating international cooperation in the collection, compilation and dissemination of remittance statistics, including capacity building.

Going forward, the stock of migrants is likely to increase globally due to income gaps, demographic changes, and climate change. Measuring/capturing remittance data in an accurate and timely manner is critical for policymakers, governments, private sector and international organizations as they develop effective strategies for promoting sustainable development and mobilize private capital.