With remittances from overseas Indians increasing nearly 10% in 2017, the World Bank in its latest Migration and Development Brief has stated that India retained the top position as the largest recipient of remittances. As per the report, remittances to India jumped 9.9% to about $69 billion in 2017, reversing the previous year's dip of $62.7 billion in 2016, but were still short of $70.4 billion received in 2014. It estimated that officially recorded remittances to low-and middle-income countries reached $466 billion in 2017, with an increase of 8.5% over $429 billion in 2016. Besides, global remittances, which include flows to high-income countries, grew 7% to $613 billion last year, from $573 billion in 2016.
The report estimated that the upsurge is likely to continue into 2018 on the back of stronger economic conditions in advanced economies (particularly the US) and an increase in oil prices that should have a positive impact on the GCC countries. It added that remittances to the region will likely grow modestly by 2.5% to $120 billion in 2018. It stated that the stronger-than-expected rebound in remittances is supported by growth in Europe, Russia and the US. It also said that the recovery in remittances, when valued in US dollars, was driven by higher oil prices and a strengthening of euro and ruble.
According to the report, India continued to top in terms of receiving remittance, and was followed by China at $64 billion, the Philippines at $33 billion, Mexico at $31 billion, Nigeria at $22 billion, and Egypt at $20 billion. Besides, remittances to South Asia grew a moderate 5.8% to $117 billion. However, flows to Pakistan and Bangladesh were both largely flat in 2017, while Sri Lanka saw a small decline (-0.9%). Pakistan received $20 billion in remittances, whereas Bangladesh received $13 billion. Moreover, sub-Saharan Africa remains the most expensive place to send money to, where the average cost is 9.4%.
The World Bank further said that major barriers to reducing remittance costs are de-risking by banks and exclusive partnerships between national post office systems and money transfer operators. These factors constrain the introduction of more efficient technologies-such as internet and smartphone apps and the use of crypto currency and blockchain-in remittance services. It also said that 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.