WB: India remains top in remittances in 2013

Regional Trends

Remittances to the East Asia and the Pacific (EAP) region are estimated to have risen by 4.8 percent in 2013 to reach $112 billion, with Thailand, Vietnam, and the Philippines seeing robust growth. Substantial movement of people continues within the region, driven in large part by persistent disparities in opportunities and incomes. While low-skilled workers account for the majority of migration, the need for high-skilled workers is growing in the region. With free mobility of high skilled workers within ASEAN countries expected to be introduced in 2015, remittance flows are forecast to exceed $148 billion by 2016.

In Europe and Central Asia (ECA), remittances rebounded from the slowdown in 2012, expanding by 10 percent in 2013 to reach $43 billion. Firm oil prices through 2013 helped fuel Russia’s economy, which is the largest source of remittances sent to the other countries in the region. The crisis in Ukraine has precipitated a substantial depreciation of the ruble so far in 2014, and brings substantial uncertainty to projections through 2016.

Remittance flows to countries in the Latin America and the Caribbean (LAC) region grew slightly by 1.9 percent in 2013 to reach $61 billion. Following a 13-month decline, remittance flows to the region began recovering in the second half of 2013. However, remittances to Mexico, the largest remittance-recipient country in the region, contracted in 2013. The positive impetus from the US economic recovery was partly offset by removals of migrants from the US. The economic slowdown and unemployment in Spain and Italy, which are also large destinations of Latin American migrants, contributed to the slowdown in remittances to the region. In the medium term, improving employment conditions in the US point to stronger growth in remittances, which are expected to reach $81 billion by 2016.

In the Middle East and North Africa (MENA) region, remittances are estimated to have fallen by 2 percent in 2013, as a drop in remittances to Egypt more than offset modest growth in the rest of the region. Despite oil prices remaining firm and underpinning the economies of the Gulf Cooperation Council (GCC) countries, departures and deportations from Saudi Arabia and other disruptions are hurting remittance flows. About 300,000 migrants returned to Egypt from Saudi Arabia in the second half of 2013, precipitated by a sharpened labor inspection campaign and set amnesty period. In addition, since November 2013, the Government of Saudi Arabia has deported over 370,000 migrants, mainly nationals of Bangladesh, Ethiopia, Egypt and Yemen. The refugee crisis in Syria continues in staggering proportions. More than 2.5 million Syrians (11 percent of the population) are now living in neighboring countries, with over 1 million in Lebanon alone. Remittance flows to the region are expected to increase modestly to $55 billion in 2016.

Growth in remittances to the South Asia region has slowed, rising by a modest 2.3 percent to $111 billion in 2013, compared with an average annual increase of more than 13 percent during the previous three years. The slowdown was driven by a marginal increase in India of 1.7 percent in 2013, and a decline in Bangladesh of 2.4 percent. The depreciation of the Indian rupee during 2013 appears to have attracted inflows through a surge in the deposits of non-resident Indians rather than remittances. In Bangladesh, the fall in remittances stems from a combination of factors, including fewer migrants finding jobs in the GCC countries, more migrants returning from GCC countries due to departures and deportations, and the appreciation of the Bangladeshi taka against the US dollar. Still, some rebound is projected in the coming years, with remittances across the region forecast to grow to $136 billion in 2016.

After remaining broadly unchanged in 2012, remittances to Sub-Saharan Africa grew by 3.5 percent in 2013 to reach $32 billion. Flows are forecast to rise to $41 billion in 2016. According to available official data, Nigeria remains the largest recipient by far, with migrants sending about $21 billion in 2013. Remittances to countries in East Africa continued to grow robustly last year, by 10 percent to Kenya and 15 percent to Uganda. In contrast, West African countries, such as Cote d’Ivoire and Senegal, saw only modest increases in 2013, after a slowdown in 2012. Sub-Saharan Africais one of the few regions in the world where official development assistance is larger than remittances, and both are much more stable than either foreign direct investment or private financing flows. Many countries in the region have large diasporas overseas, with substantial diaspora savings that could be mobilized for development financing.