Remittances to lower-income nations ease this year

Cash transfers to low- and middle-income countries eased this year, with rising prices taking a toll on migrants’ incomes, according to the World Bank.

Remittances to lower-income countries rose about 5 percent to $626 billion, lower than the 10.2-percent jump in 2021, it said in a report on Wednesday.

While the reopening of economies as the coronavirus pandemic receded helped with employment, rising costs “adversely affected migrants’ real incomes,” the Washington, D.C.-based development lender said.

And in 2023, the increase of such remittance flows is projected to slow further to 2 percent, as gross domestic product growth in wealthier countries moderates.

“Downside risks remain substantial, including a further deterioration of the war in Ukraine, volatile oil prices and currency exchange rates, and a deeper-than-expected downturn in major high-income countries,” the World Bank said.

Meanwhile, rising oil prices and continued demand for migrant workers boosted remittances to Central Asian countries, while the ruble’s appreciation against the US dollar translated into higher value of outward transfers.

But in Europe, a weaker euro had the opposite effect, the report said.

In Ukraine, remittance growth is pegged at 2 percent, lower than earlier estimates “as funds for Ukrainians were sent to countries hosting them, and hand carried money transfers likely increased,” the bank said.

Meanwhile, India is on track to receive over $100 billion in yearly remittances in 2022.