Remittances Remain Resilient but Likely to Slow
Recently, the World Bank in its latest ‘Migration and Development Brief Report’ has underlined the slowdown in remittance flows across the world.
Key findings of report:
- In the year 2022, remittance inflows in India were to increase by more than 24% to reach a record high of $111 billion. In the year 2023, it is estimated to increase by only 0.2%.
- About 36% of remittance flows to India come from the United States, the United Kingdom and Singapore.
- Remittance flows to low- and middle-income countries (LMICs) are projected to grow by only 1.4% in 2023. There was an increase of 8% in the year 2022.
- South Asia is likely to have the lowest remittance growth rate (0.3%). The reason for this is the high base in the year 2022 along with the decrease in demand for highly skilled IT personnel in the United States and Europe.
- Remittance refers to the transfer of money by migrant workers to their country of origin. Migrant workers usually send money to their families living in their home countries.
Effect of remittance:
- It is an important source of foreign exchange for a country. Also, it helps to strengthen the value of the local currency.
- Remittances contribute about 3% to India’s GDP.
- It increases consumer demand for goods and services.
Source – Business Standard
