Resilient labour markets drive 3.8% growth in remittances in 2023, World Bank says

Remittances to poor and middle-income countries grew an estimated 3.8 per cent to reach $669 billion this year.

Resilient labour markets in advanced economies and GCC countries continued supporting migrants’ ability to send money home, according to a new World Bank report.

However, this was a moderation from the high gains of the previous two years, the bank said.

There is a risk of a decline in real income for migrants next year in the face of global inflation and low growth prospects, according to the World Bank’s latest migration and development brief.

India is the top remittance recipient country this year, receiving funds worth $125 billion, followed by Mexico at $67 billion, China at $50 billion, the Philippines at $40 billion, and Egypt at $24 billion, the Washington-based lender said.

The US continued to be the largest source of remittances, according to the report.

“High inflation and subdued global growth is affecting how much money migrants can send,” said Iffath Sharif, global director of the social protection and jobs global practice at the World Bank.

“Labour markets and social protection policies in host countries should be inclusive of migrants, whose remittances serve as a lifeline for developing countries.”

Three in four people in the Middle East who transfer money to loved ones back home expect their volume of remittances to increase over the next 12 months given rising inflationary challenges for households, according to a March survey by Western Union.

Nearly three quarters of 30,600 consumers said they were transferring more money than in previous years because of economic challenges such as a higher cost of living around the world, while 79 per cent of receiving consumers said they intended to ask for more money, the poll found.

Based on the trajectory of weaker global economic activity, growth of remittances to poor and middle-income countries is expected to soften further to 3.1 per cent in 2024, the World Bank said.

Other downside risks include the prospect of weaker job markets in several high-income countries, volatile oil prices, currency exchange rates and a deeper-than-expected economic downturn in some countries, the lender added.