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Remittances grow 5pc in 2022, despite global headwinds: WB

Published : Friday, 2 December, 2022 at 12:00 AM  Count : 213

Remittances to low and middle income countries (LMICs) withstood global headwinds in 2022, growing an estimated 5 percent to $626 billion.
This is sharply lower than the 10.2 percent increase in 2021, according to the latest World Bank Migration and Development Brief.
Remittances are a vital source of household income for LMICs. They alleviate poverty, improve nutritional outcomes, and are associated with increased birth weight and higher school enrollment rates for children in disadvantaged households.
Studies show that remittances help recipient households to build resilience, for example through financing better housing and to cope with the losses in the aftermath of disasters.
Remittance flows to developing regions were shaped by several factors in 2022. A reopening of host economies as the COVID-19 pandemic receded supported migrants' employment and their ability to continue helping their families back home.
Rising prices, on the other hand, adversely affected migrants' real incomes. Also influencing the value of remittances is the appreciation of the ruble, which translated into higher value, in U.S. dollar terms, of outward remittances from Russia to Central Asia.
The Brief said remittances to South Asia grew an estimated 3.5 percent to $163 billion in 2022, but there is large disparity across countries, from India's projected 12 percent gain-which is on track to reach $100 billion in receipts for the year--to Nepal's 4 percent increase, to an aggregate decline of 10 percent for the region's remaining countries.
The easing of flows reflects the discontinuation of special incentives some governments had introduced to attract flows during the pandemic, as well as preferences for informal channels offering better exchange rates.
 Remittances to India were enhanced by wage hikes and a strong labor market in the United States and other OECD countries. In the Gulf Cooperation Council destination countries, governments ensured low inflation through direct support measures that protected migrants' ability to remit. Sending $200 to the region cost 4.1 percent on average in the second quarter of 2022, down from 4.3 percent a year ago.
In the case of Europe, a weaker euro had the opposite effect of reducing the U.S. dollar valuation of remittance flows to North Africa and elsewhere. In countries that experienced scarcity of foreign exchange and multiple exchange rates, officially recorded remittance flows declined as flows shifted to alternative channels offering better rates.
"Migrants help to ease tight labor markets in host countries while supporting their families through remittances. Inclusive social protection policies have helped workers weather the income and employment uncertainties created by the COVID-19 pandemic. Such policies have global impacts through remittances and must be continued," said Michal Rutkowski, World Bank Global Director for Social Protection and Jobs.    -BSS













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