In­dia re­mains top re­mit­tance re­cip­i­ent

IN­FLOWS INTO SOUTH ASIA PRO­JECTED TO IN­CREASE BY 13.5% TO $132B IN 2018, WORLD BANK RE­PORT SHOWS

Gulf News - - News - DUBAI Staff Re­port

In­dia has re­tained its top spot as a global re­ceiver of re­mit­tances, ac­cord­ing to the World Bank’s Mi­gra­tion and De­vel­op­ment Brief, re­leased yes­ter­day.

In­dia re­mit­tances are ex­pected to to­tal $80 bil­lion (Dh293 bil­lion) this year, fol­lowed by China ($67 bil­lion), Mex­ico and the Philip­pines ($34 bil­lion each), and Egypt ($26 bil­lion).

Re­mit­tances to South Asia are pro­jected to in­crease by 13.5 per cent to $132 bil­lion in 2018, a stronger pace than the 5.7 per cent growth seen in 2017. The up­surge is driven by stronger eco­nomic con­di­tions in ad­vanced economies, par­tic­u­larly the United States, and the in­crease in oil prices hav­ing a pos­i­tive im­pact on out­flows from some GCC coun­tries, such as the UAE which re­ported a 13 per cent growth in out­flows for the first half of 2018.

Bangladesh and Pak­istan ex­pe­ri­enced upticks of 17.9 per cent and 6.2 per cent in 2018, re­spec­tively. For 2019, it is pro­jected that re­mit­tance growth for the re­gion will slow to 4.3 per cent, due to a mod­er­a­tion of growth in ad­vanced economies, lower mi­gra­tion to the GCC and the ben­e­fits from the oil price spurt dis­si­pat­ing.

Re­mit­tances to the Mid­dle East and North Africa re­gion are pro­jected to grow by 9.1 per cent to $59 bil­lion in 2018, fol­low­ing 6 per cent growth in 2017. The growth rate is driven by Egypt’s pro­jected rapid re­mit­tance growth of 14 per cent. In con­trast, re­mit­tances to Jor­dan are pro­jected to de­cline by 1 per cent in 2018.

Be­yond 2018, the re­gion is ex­pected to ex­pe­ri­ence con­tin­ued growth in re­mit­tances, although at a slower pace of 2.7 per cent in 2019. Lower oil prices are ex­pected to mod­er­ate growth in GCC coun­tries and re­mit­tance out­flows will also be damp­ened by na­tion­al­i­sa­tion poli­cies of Saudi Ara­bia, no­tably in sec­tors ban­ning for­eign work­ers as of 2018.

Fu­ture growth

As global growth is pro­jected to mod­er­ate, fu­ture re­mit­tances to low- and mid­dle-in­come coun­tries are ex­pected to grow moder­ately by 4 per cent to $549 bil­lion in 2019. Global re­mit­tances are ex­pected to grow 3.7 per cent to $715 bil­lion in 2019.

The brief notes the global av­er­age cost of send­ing $200 re­mains high at 6.9 per cent in 2018’s third quar­ter.

“Even with tech­no­log­i­cal ad­vances, re­mit­tances fees re­main too high, dou­ble the SDG (Sus­tain­able De­vel­op­ment Goal) tar­get of 3 per cent. Open­ing up mar­kets to com­pe­ti­tion and pro­mot­ing the use of low-cost tech­nolo­gies will ease the bur­den on poorer cus­tomers,” said Mah­moud Mo­hieldin, se­nior vice pres­i­dent for the 2030 De­vel­op­ment Agenda, United Na­tions Re­la­tions, and Part­ner­ships at the Bank.

The av­er­age cost of re­mit­ting in South Asia was the low­est at 5.4 per cent, while Sub-Sa­ha­ran Africa con­tin­ued to have the high­est at 9 per cent.

“The fu­ture growth of re­mit­tances is vul­ner­a­ble to lower oil prices, re­stric­tive mi­gra­tion poli­cies, and an over­all mod­er­a­tion of eco­nomic growth. Re­mit­tances have a di­rect im­pact on al­le­vi­at­ing poverty for many house­holds, and the World Bank is well po­si­tioned to work with coun­tries to fa­cil­i­tate re­mit­tance flows,” said Michal Rutkowski, se­nior director of the So­cial Pro­tec­tion and Jobs Global Prac­tice at the World Bank.

Re­mit­tance flows to the East Asia and Pa­cific re­gion are ex­pected to grow by 6.6 per cent in 2018, to $142 bil­lion, 1.5 per­cent­age points higher than the growth rate in 2017. Re­mit­tances to the Philip­pines are ex­pected to grow by 2.8 per cent in 2018, lower than 2017’s 5.4 per cent growth.

Lower growth is due to the sub­stan­tial de­cline in pri­vate trans­fers from the Mid­dle East which fell by 17 per cent in the first eight months of 2018 rel­a­tive to the same pe­riod in 2017.

Re­mit­tances to In­done­sia are ex­pected to ex­pe­ri­ence dou­ble digit growth in 2018 at around 24 per cent, after re­main­ing flat in 2017.

The fu­ture ... of re­mit­tances is vul­ner­a­ble to lower oil prices, re­stric­tive mi­gra­tion poli­cies, and mod­er­a­tion of eco­nomic growth.” Michal Rutkowski | Se­nior director, World Bank

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