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Remittances on track to become the largest source of external financing in developing countries

Dilip Ratha's picture
Officially recorded annual remittances to low- and middle-income countries (LMICs) reached a record high of $529 billion in 2018, according to the World Bank’s latest Migration and Development Brief. This represents a 9.6 percent growth over the previous record high in 2017.
 
Regionally, growth in remittance inflows ranged from almost 7 percent in East Asia and the Pacific to 12 percent in South Asia. The overall increase was driven by a stronger economy and employment situation in the United States and a rebound in outward flows from some Gulf Cooperation Council (GCC) countries and the Russian Federation.
 
With foreign direct investment (FDI) on a downward trend in recent years, remittances reached close to the level of FDI flows in 2018. Excluding China, remittances to LMICs ($462 billion) were significantly larger than FDI flows in 2018 ($344 billion). This makes remittances the largest source of foreign exchange earnings in the LMICs, excluding China.
 
Bearing in mind that the Brief uses officially recorded remittances data, if we were to include remittances through informal channels, its true size and social impact is much larger.
 
In 2019, remittance flows to LMICs are likely to reach $550 billion, to become their largest source of external financing—larger than FDI, including flows to China. Remittances are already more than three times the size of official development assistance.

Accelerated remittances growth to low- and middle-income countries in 2018

Dilip Ratha's picture
On the back of stronger growth in remittance-sending economies, remittance flows to low- and middle-income countries are expected to reach a new record of $528 billion in 2018, an increase of 10.8 percent from last year, according to the World Bank’s Migration and Development Brief released today.
 

Record high remittances to low- and middle-income countries in 2017

Dilip Ratha's picture
The World Bank’s latest Migration and Development Brief shows that officially recorded remittances to developing countries touched a new record—$466 billion in 2017, up 8.5 percent over 2016. The countries that saw the highest inflow in remittances were India with $69 billion, followed by China ($64 billion), the Philippines ($33 billion), Mexico ($31 billion), Nigeria ($22 billion), and Egypt ($20 billion).

Remittance flows set to recover this year, after two years of decline

Dilip Ratha's picture
The latest edition of the Migration and Development Brief and an accompanying Press Release have just been launched. Remittances to low- and middle-income countries are on course to recover in 2017 after two consecutive years of decline, says the latest edition of the World Bank’s Migration and Development Brief, released today.

Remittances to developing countries decline for an unprecedented 2nd year in a row

Dilip Ratha's picture
We just launched the latest edition of the Migration and Development Brief and an accompanying Press Release.
 
Remittances to developing countries decreased by 2.4 percent to an estimated $429 billion in 2016. This is the second consecutive year that remittances have declined. Such a trend has not been seen in the last 30 years. Even during the global financial crisis, remittances contracted only during 2009, bouncing back in the following year.

What if Africa calls upon its diaspora to boost economic transformation?

Nadege Desiree Yameogo's picture
In observance of the International Migrants Day, Dec 18

The stock of African migrants in 2015 was estimated at about 23.2 million (Migration and Remittances Factbook 2016: and the top emigration countries are mostly fragile and poor (see Table 1). About 31.1% of Sub-Saharan Africans migrate to high-income countries compared to 90% in North Africa. The leading destination of these migrants include France, Saudi Arabia, USA, UK, Spain, and Italy. The second generation of African diaspora in the Western hemisphere was estimated at 1.1 million in 2012, and most of them live in Australia, Europe, and the USA.
 

Trends in Remittances, 2016: A New Normal of Slow Growth

Dilip Ratha's picture
Against a backdrop of tepid global growth, remittance flows to low and middle income countries (LMICs) seem to have entered a “new normal” of slow growth. In 2016, remittance flows to LMICs are projected to reach $442 billion, marking an increase of 0.8 percent over 2015 (figure 1 and table 1). The modest recovery in 2016 is largely driven by the increase in remittance flows to Latin America and the Caribbean on the back of a stronger economy in the United States; by contrast remittance flows to all other developing regions either declined or recorded a deceleration in growth.  

One additional African migrant creates about USD 2,800 (a year) in additional exports for his/her country of origin

Raju Jan Singh's picture

Standard trade literature tends to view migration and trade as substitutes. In that framework, either workers migrate to satisfy foreign demand or foreign demand is satisfied by trading goods and services. There is a growing literature, however, emphasizing that migrant networks facilitate bilateral economic transactions by disseminating their preferences for goods from their country of origin and/or by removing informational and cultural barriers between hosts and origin countries. In this case, migration would reduce transaction costs associated with trade and may be a complement rather than a substitute to trade.

UNHCR launches update on a year of crises

Bryce Quillin's picture

The UN High Commission for Refugees (UNHCR) launched its 2011 Global Trends report on refugees, stateless persons and internally displaced persons shortly in advance of World Refugee Day on July 20. Bearing the subtitle of a "year of crises", the report documents that conflicts in Africa contributed to the emergence of over 800,000 refugees last year. This is the highest number in over ten years.

Migration and Trade Go Hand in Hand for Africa and the US

Sonia Plaza's picture

A recently introduced bipartisan legislation entitled, “The Increasing American Jobs through Greater Exports to Africa Act of 2012 “ will promote the increase of US exports to Africa. On March 22, U.S. Rep. Bobby L. Rush (D-IL) jointly with U.S. Rep. Chris Smith (R-NJ) presented a bill to improve the competitiveness of U.S. business in Africa, including African diaspora businesses. The bill also proposes to explore ways to utilize diaspora remittances to Africa for development purposes.

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