Global remittances set for slower growth in 2023: World Bank

Global remittances set for slower growth in 2023: World Bank

Remittances to low and middle income countries (LMIC) are expected to grow by 1.4 per cent to reach $656 billion in 2023, following a remarkable 8.0 per cent growth in 2022 and 10.6 per cent in 2021. In its latest Migration and Development Brief, the World Bank cited softening economic activity in remittance source counties resulting in reduced employment and wage gains for migrants as the main reason for the slowdown. Besides economic growth and the employment levels of foreign workers, the other two variables that affect remittance flows are oil prices, especially in the GCC countries and Russia, as well as the exchange rates of local currencies with respect to the US dollar. “In many remittance-recipient countries facing balance of payments difficulties and the emergence of gaps between the official and the market exchange rate, remittance flows may shift to informal channels, which can potentially underestimate the true size of official data on remittance flows,” the Washington-based global lender said in its report. GCC countries host around 35 million migrant workers or approximately 10 per cent of the global migrants. These foreign workers mostly come from LMICs such as India, Jordan, Egypt and the Philippines. In the early 2000s,