Steady remittance flows to fuel the next stage of socio-economic growth in India

Steady remittance flows to fuel the next stage of socio-economic growth in India

Despite disruptions in economic activities, employment and travel-related restrictions, remittance flows worldwide remained stable during the pandemic. Officially recorded remittance flows to recipient countries reached $540 billion (Dh1,983.1 billion) in 2020, just 1.6 per cent below the 2019 total of $548 billion, according to the World Bank’s Migration and Development Brief. The main drivers for the steady flow in the past two years included fiscal stimulus that resulted in better-than-expected economic conditions in host countries, a shift in flows from cash to digital and from informal to formal channels, and cyclical movements in oil prices and currency exchange rates, the report states. With global growth expected to rebound further in 2022, remittance flows are projected to increase by 2.2 per cent to $565 billion this year from $553 billion in 2021. Flows to India – the world’s largest recipient of remittances – reached $87 billion last year, with a significant chunk coming from the UAE. “The Indian corridor has continued to perform well despite the pandemic. However, with the Indian rupee getting stronger as compared to the last quarter of 2021, we are seeing consumers adopting a wait and watch approach,” says Richard Wason, CEO, LuLu International Exchange. “This has