RECORD HIGH REMITTANCES SENT GLOBALLY IN 2018
Remittances to low- and middle-income countries reached a record high in 2018- with $529 billion in 2018, an increase of 9.6 percent over the previous record high of $483 billion in 2017. The remittance flows to low- and middle-income countries are likely to reach $550 billion in 2019, to become their largest source of external financing.
Nepal is the 19th largest receiver of remittance around the world and fourth largest in South Asia, with Nepali migrant workers sending home $ 8.1 billion, according to Migration and Development Brief by World Bank released on Monday. Nepal is also among the top five recipient smaller economies along with Tonga, Kyrgyzstan, Tajikistan and Haiti.
Remittances to South Asian Countries increased by an estimated 12.3 percent to $ 131 billion in 2018— outpacing the 6 percent growth in 2017. India was the top remittance recipients with $79 billion, followed by China ($67 billion), Mexico ($36 billion), the Philippines ($34 billion), and Egypt ($29 billion), the report states.
In South Asia, India was followed by Pakistan ($21 billion) and Bangladesh ($15.5 billion) and Sri Lanka ($7.5 billion). India saw remittances grew by over 14 percent in 2018. In Pakistan, remittance growth remained moderate (6.7 percent). In Bangladesh, remittances showed a brisk uptick in 2018 (14.8 percent), and Sri Lanka witnessed remittance growth of 3.8 percent, the report further reads.
The remittance in South Asian Countries is projected to slow to 4.3 percent in 2019 due to a moderation of growth in high-income economies and slower migration to the GCC countries.
According to the report, record high remittances were sent globally in 2018. Remittances to low- and middle-income countries reached a record high in 2018- with $529 billion in 2018, an increase of 9.6 percent over the previous record high of $483 billion in 2017. Global remittances, which include flows to high-income countries, reached $689 billion in 2018, up from $633 billion in 2017.
The overall increase was driven by a stronger economy and employment situation in the United States and a rebound in outward flows from some Gulf Cooperation Council (GCC) countries and the Russian Federation, the report states.
The remittance flows to low- and middle-income countries are likely to reach $550 billion in 2019, to become their largest source of external financing.
Remittance flows grew in all six regions, particularly in South Asia (12.3 percent) and Europe and Central Asia (11.2 percent), the report states.
Remittances to the East Asia and Pacific region grew almost 7 percent to $143 billion in 2018, faster than the 5 percent growth in 2017. Remittances to the Philippines rose to $34 billion, but growth in remittances was slower due to a drop in private transfers from the GCC countries. Flows to Indonesia increased by 25 percent in 2018, after a muted performance in 2017.
After posting 22 percent growth in 2017, remittances to Europe and Central Asia grew an estimated 11 percent to $59 billion in 2018. Continued growth in economic activity increased outbound remittances from Poland, Russia, Spain, and the United States, major sources of remittances to the region. Smaller remittance-dependent countries in the region, such as the Kyrgyz Republic, Tajikistan, and Uzbekistan, benefited from the sustained rebound of economic activity in Russia. Ukraine, the region’s largest remittance recipient, received a new record of more than $14 billion in 2018, up about 19 percent over 2017. This surge in Ukraine also reflects a revised methodology for estimating incoming remittances, as well as growth in neighboring countries’ demand for migrant workers.
Remittances flows into Latin America and the Caribbean grew 10 percent to $88 billion in 2018, supported by the strong US economy. Mexico continued to receive the most remittances in the region, posting about $36 billion in 2018, up 11 percent over the previous year. Colombia and Ecuador, which have migrants in Spain, posted 16 percent and 8 percent growth, respectively. Three other countries in the region posted double-digit growth: Guatemala (13 percent) as well as Dominican Republic and Honduras (both 10 percent), reflecting robust outbound remittances from the United States.
Remittances to the Middle East and North Africa grew 9 percent to $62 billion in 2018. The growth was driven by Egypt’s rapid remittance growth of around 17 percent. Beyond 2018, the growth of remittances to the region is expected to continue, albeit at a slower pace of around 3 percent in 2019 due to moderating growth in the Euro Area.
Remittances to Sub-Saharan Africa grew almost 10 percent to $46 billion in 2018, supported by strong economic conditions in high-income economies. Looking at remittances as a share of GDP, Comoros has the largest share, followed by the Gambia, Lesotho, Cabo Verde, Liberia, Zimbabwe, Senegal, Togo, Ghana, and Nigeria.
The reports further states that the global average cost of sending remittances remained at about 7 percent in the first quarter of 2019, roughly the same level as in recent quarters. The cost of sending money to Sub Saharan Africa was 9.3 percent, significantly higher than the SDG target of 3 percent. Banks were the costliest channel for transferring remittances, at an average cost of 10.9 percent.
Another factor making money transfer costs rise are banks’ efforts to avoid money-laundering and terrorism finance. Some banks simply cease working with some money transfer organisations deemed too risky, according to the report.
The deployment of workers from South Asia in the GCC countries has plunged, according to the report. According to Nepal Rastriya Bank, the departure of Nepali migrant plunged 39.2 percent in the first seven months of the fiscal year, which is a 4.9 percent drop compared to last year.
Japan has brought a new policy to admit 345,000 foreign workers over a period of 5 years from the following nine priority countries: Cambodia, China, Indonesia, Mongolia, Myanmar, Nepal, Philippines, Thailand, and Vietnam. Latin America is facing several migratory movements from Central America and Venezuela. Since 2015, around 2.7 million persons have left Venezuela for other countries, especially in South America, the report states.