Remittances Reach $100 Billion

Global remittances are expected to pick up from $781 billion in 2021 to $794 billion in 2022 and further to $815 billion in 2023. A major reason for the pick-up in remittances is the increase in migration to the Organisation for Economic Co-operation and Development countries which went up by 22% in 2021 and this trend is expected to hold in 2022. Another factor that boosted global remittances is the stimulus packages to bolster the economies in the United States (US) and the European Union during the pandemic. But the pick-up in inflation and the hardening of the monetary stance in advanced economies are likely to adversely affect the flow of remittances in the coming years.

The slowdown in the growth of remittances is however sharper in the low- and middle-income countries where the growth rates steadily fell from 10.2% to 4.9% and further to 2% during this period. The only major consolation is that, despite this slowdown, the flow of remittances will surpass both foreign direct investment and portfolio debt and equity flows to the low- and middle-income countries. Thus, the stability in the flow of remittances is a major factor that demarcates them from other external sector financial flows.