India to top global remittances with USD 71 billion this year

India’s growth rate is substantially faster than the 3.4 per cent growth recorded in 2013

Update: 2014-10-07 09:01 GMT
The deficit was 62.8 percent during the comparable period in the previous fiscal year

Washington: India will retain its top spotwith USD 71 billion in remittances this year as remittances to developing countries are expected to reach USD 435 billion, an  increase of five per cent over 2013, the World Bank has said. In its latest issue of the Migration and Development Brief, the World Bank said yesterday India, with the world's  largest emigrant stock of 14 million people, will remain in  the top spot this year, attracting about USD 71 billion in  remittances.

"Remittances to developing countries grew this year by five per cent. Remittance inflows provided stable cover for substantial parts of the import bill for such countries as  Egypt, Pakistan, Haiti, Honduras, and Nepal," said Kaushik  Basu, Senior Vice President and Chief Economist of the World  Bank Group. 

He said India and China led the chart with "projected remittance inflows of USD 71 and USD 64 billion respectively in 2014." Other large recipients are China (USD 64 billion), the Philippines (USD 28 billion), Mexico (USD 24 billion), Nigeria  (USD 21 billion), Egypt (USD 18 billion), Pakistan (USD 17  billion), Bangladesh (USD 15 billion), Vietnam (USD 11  billion) and Ukraine (USD 9 billion). 

The growth rate this year is substantially faster than the 3.4 per cent growth recorded in 2013, driven largely by remittances to Asia and Latin America, it said.  Remittances to developing countries will continue climbing in the medium term, reaching an estimated USD 454 billion in 2015. Global remittances, including those to high-income countries, are estimated at USD 582 billion this year, rising to USD 608 billion next year, it said. The Bank said remittances to the South Asia region are increasing more robustly this year, accelerating from slower growth in 2013. Although flows to India, the region's largest remittance recipient, will grow modestly by 1.5 per cent in 2014. 

The expansion is being led by flows from the Gulf Cooperation Council countries, where skilled and unskilled  workers are finding renewed job opportunities.  As a result, the growth rate of remittances to the region is expected to more than double this year to 5.5 per cent  (from 2.7 per cent in 2013), boosting volumes to USD 117 billion in 2014 and rising further to USD 123 billion in 2015, it said. 

"In addition, India and the Philippines benefit from having migrants with the most diverse destination spread, thereby creating buffers against regional shocks. Given the  growing importance of this sector, the World Bank's Migration  and Development Brief has become an essential tool for global  development policy experts," Basu said.  The brief notes that the global average cost of sending remittances continued its downward trend in the third quarter  of 2014, falling to 7.9 per cent of the value sent, compared  to 8.9 per cent a year earlier. However, the cost of sending money to Africa remains stubbornly high, exceeding 11 per  cent. 

As a share of GDP (2013), the top recipients of remittances were Tajikistan (42 per cent), Kyrgyz Republic (32  per cent), Nepal (29 per cent), Moldova (25 per cent), Lesotho  and Samoa (24 per cent each), Armenia and Haiti (both 21 per  cent), the Gambia (20 per cent) and Liberia (18 per cent).  It said the forced migration due to conflict was at its  highest level since World War II, affecting more than 51  million people.  An additional 22 million people have been forced to move  due to natural disasters, bringing the total affected by  forced migration to at least 73 million, according to the  latest available data. 

"Despite the encouraging outlook for remittance flows, the  circumstances of many migrants are troubling," said Dilip  Ratha, Lead Economist, Migration and Remittances, at the World  Bank's Development Prospects Group and Head of the Global  Knowledge Partnership on Migration and Development (KNOMAD).  "With so many people on the move against their will and many others undertaking desperate and dangerous journeys, it  is clear that more effort is needed to make migration safer  and cheaper by exploring economically viable policy options,"  he said. 

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