India tops the list with likely 23% surge in remittances to $125 bn in 2023: World Bank

Remittances to South Asia are estimated to have grown by 7.2 percent in 2023, reaching $189 billion.

India-bound remittances are expected to surge over 11 percent, reaching $125 billion, in 2023, according to a World Bank report. This significant increase solidifies India's position as the leading recipient of remittances globally, surpassing countries such as Mexico ($67 billion) and China ($50 billion).

The World Bank's latest Migration and Development Brief says that remittances to low-and middle-income countries (LMICs) experienced a growth of approximately 3.8 percent in 2023, reaching a collective total of $669 billion. The ability of migrants to send money home is supported by resilient labour markets in advanced economies and Gulf Cooperation Council (GCC) countries.

The concern highlighted by the World Bank is the risk of a decline in real income for migrants in 2024, given the backdrop of global inflation and low growth prospects.

Also read: India top recipient of money from overseas in 2022 with $100 billion

Remittances to South Asia are estimated to have grown by 7.2 percent in 2023, reaching $189 billion. This growth is primarily driven by remittances to India. Remittances play a crucial role in countries like India, helping mitigate the impact of falling foreign direct investment and higher trade deficits.

The US remains the largest source of remittances globally, with Saudi Arabia coming second. The main contributing factors to the growth of remittances to India include declining inflation and strong labour markets in high-income source countries. This has boosted remittances from highly skilled Indians in the US, UK, and Singapore, which collectively account for 36 percent of total remittance flows to India.

Additionally, remittance flows from the GCC countries, especially the UAE, which accounts for 18 percent of India's total remittances and is the second-largest source of them after the US.

Also read: Remittances hit 4-quarter low in April-June, but no issues seen in CAD financing

The regional breakdown of remittance inflows reveals varied trends. Remittances grew for Latin America and the Caribbean (8 percent), East Asia and the Pacific (3 percent), and Sub-Saharan Africa (1.9 percent). However, flows to the Middle East and North Africa fell for the second consecutive year, declining by 5.3 percent, primarily attributed to a sharp drop in flows to Egypt. Remittances to Europe and Central Asia also saw a dip of 1.4 percent after a substantial gain of over 18 percent in 2022, the report said.