Remittances to low- and middle-income countries from citizens working abroad will rise by more than expected in 2021 thanks to a strong economic recovery in the United States and Europe as well as rising oil revenue in Russia and the gulf, the World Bank said.
Remittances are expected to have grown by 7.3% to US$589 billion (RM2.4 trillion) this year following a 1.7% decline in 2020 as the fallout from the COVID-19 pandemic tipped the world economy into a recession, the World Bank said in its report published on November 17.
“The immediate impact of the crisis on remittance flows was very deep,” said Dilip Ratha, lead author of the report and head of the Global Knowledge Partnership on Migration and Development (KNOMAD).
“The surprising pace of recovery is welcome news. To keep remittances flowing, especially through digital channels, providing access to bank accounts for migrants and remittance service providers remains a key requirement,” said Ratha.
Remittances to East Asia and the Pacific are forecast to fall 4% this year to US$131 billion, though excluding China the yearly flow would increase by 1.4%. Remittances to South Asia likely grew around 8% to US$159 billion in 2021.
Remittance flows to Europe and Central Asia are seen rising 5.3% to US$67 billion, the Middle East and North Africa is expected to increase remittance inflows by 9.7% to US$62 billion, and flows to Sub-Saharan Africa should see a 6.2% increase to US$45 billion, the World Bank said.
In Latin America and the Caribbean, remittance flows will likely reach a new high of US$126 billion this year with Mexico taking some 42% of the regional haul, or close to US$53 billion.
Globally, remittances are expected to grow by 2.6% in 2022, with the downside risks focused on a resurgence of COVID-19 cases and the mobility restrictions that could come with it. Lower fiscal stimulus in developed countries could also weaken remittance flows.