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Remittance (international money transfer) has grown exponentially over the past year, with the global workforce becoming increasingly mobile. Sending money abroad comes with the complexities of different international currencies and banking systems – which significantly affects how remittance flows from region to region. To be up to date on remittance trends, read on to see what’s happening in East Asia and the Pacific, Latin America and the Caribbean, Europe and Central Asia, Europe and Central Asia, the Middle East and North Africa, South Asia, and Sub-Saharan Africa.
East Asia and the Pacific
In 2021, remittance flows to the Pacific and East Asia reached over $133 billion, close to the previous level in 2017. Still, in 2021, in the Pacific and East Asia, excluding China, remittance grew by 2.5 per cent. As many Filipino migrants migrated to the United States and had access to jobs and more wages as they lived and worked there, remittance to the Philippines benefitted massively. In addition to the Philippines, the following economies also had a high percentage of GDP due to remittance inflows from Samoa, Tonga, the Marshall Islands, and Fiji. In 2022, excluding China, remittance inflows were expected to grow by 3.8 per cent in East Asia and the Pacific region.
Latin America and the Caribbean
In 2021, remittance flows to the Caribbean and Latin America grew to $131 billion, a 25.3 per cent growth from 2020, due to a massive job recovery for the United States foreign-born workers. Countries like Ecuador (31 per cent), Mexico (25 per cent), Honduras (29 per cent), Guatemala (35 per cent), Nicaragua (16 per cent), Dominican Republic (26 per cent), Haiti (21 per cent), El Salvador (26 per cent) and Colombia (24 per cent) saw double-digit growth rates. Mexico recorded remittance inflows from transit migrants from Guatemala, Honduras, Haiti, El Salvador, Cuba, Venezuela, and other countries. For countries like Honduras, Jamaica, Haiti, and El Salvador, remittances are a vital livelihood source, representing at least 20 per cent of their GDP.
Europe and Central Asia
Reaching historic highs of $74 billion in 2021, remittance flows to Europe and Central Asia increased by 8 per cent. This resulted from solid economic activity and rebounding energy prices in the European Union. Poland – the most prominent destination country for migrant workers from Ukraine – received over $18.2 billion in inflows in 2021.
In Central Asia, vital finance and economic growth source are personal transfers, for which the prime source is Russia.
In 2022, remittance flows to Ukraine were expected to grow by more than 20 per cent.
The Middle East and North Africa
Based on data from the World Bank, remittances grew by 7.6 per cent to the Middle East and North African region in 2021, amounting to over $61 billion due to massive gains from Egypt and Morocco. This growth was supported by the economic growth experienced in host countries in the European Union and migration to Morocco, Tunisia and Egypt.
Remittance has been an enormous source of development for the Middle East and North Africa, accounting for over 60 per cent of 2021’s total inflow. Remittance flow to the Middle East and North Africa region is expected to grow by another 6 per cent in 2022.
The pandemic in 2020 caused the majority of South Asian migrants to migrate back to their home countries; however, due to the availability of vaccines, migrants returned to their host country in 2021, leading to a growth in remittances to South Asia of almost 7 per cent amounting to $157 billion. An added factor that contributed to the development of remittances in South Asia in 2021 was the improved economic performance in the United States. According to the World Bank, remittance inflows are expected to drop to 4.4 per cent in 2022.
Following a decline in 2020, remittance inflows to Sub-Saharan Africa increased by 14.1 per cent, amounting to almost 49 billion in 2021. This was supported by strong economic growth in Europe and the United States. With the highest receipt of remittance inflows, Nigeria recorded an increase to over 11.2 per cent due to policies that drive inflows through the banking system. Gambia (31 per cent), Cabo Verde (23.3 per cent) and Kenya (20.1 per cent) also recorded growth in remittance inflows in this region. Remittance inflows in 2022 are expected to grow by 7.1 per cent.
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The World Bank