NEW DELHI: The Indian diaspora sent back $69 billion in remittances in 2017, retaining India’s top spot in the list of countries that receive remittances from their nationals abroad. According to the World Bank’s Migration and Development Briefs for 2017, remittances to India grew at 9.9 per cent compared to the previous year.
“Remittance inflows improved in all regions and the top remittance recipients were India with $69 billion, followed by China ($64 billion), the Philippines ($33 billion), Mexico ($31 billion), Nigeria ($22 billion), and Egypt ($20 billion),” the World Bank noted.The sharp rise in remittances to India propped up the growth rate for the South Asian region as a whole. Total remittances flowing into the region stood at $117 billion, up 5.8 per cent. However, flows to Pakistan and Bangladesh were both largely flat in 2017, while Sri Lanka saw a small decline (-0.9 per cent). The World Bank noted that 2018 might see slower growth for the region as a whole, likely growing “modestly by 2.5 per cent to $120 billion”.
Officially recorded remittances to low- and middle-income countries reached $466 billion in 2017, an increase of 8.5 per cent. Global remittances, which include flows to high-income countries, grew 7 per cent to $613 billion in 2017.According to the World Bank, the stronger-than-expected recovery in remittances is driven by growth in Europe, the Russian Federation, and the United States. “The rebound in remittances, when valued in US dollars, was helped by higher oil prices and a strengthening of the euro and ruble.”
But, while remittances are expected to continue to increase in 2018 (by 4.1 per cent) longer-term risks to growth include stricter immigration policies in many remittance-source countries. Also, de-risking by banks and increased regulation of money transfer operators, both aimed at reducing financial crime, continue to constrain the growth of formal remittances. The global average cost of sending $200 was 7.1 per cent in the first quarter of 2018, more than twice as high as the Sustainable Development Goal target of 3 per cent.
“While remittances are growing, countries, institutions, and development agencies must continue to chip away at high costs of remitting so that families receive more of the money,” said Dilip Ratha, lead author of the Brief and head of KNOMAD.