Remittances to Mena up 9.7% to $62bn in 2021: WB

Remittances to the Mena region are projected to have grown by an estimated 9.7% in 2021 to $62 billion, supported by a return to growth of host countries in the European Union and the upsurge in global oil prices, said the World Bank in a new report.

The increase was driven by strong gains in inflows to Egypt (12.6 percent to $33 billion) and to Morocco (25 percent to $9.3 billion), return migration and transit migration respectively, playing important roles in the favourable outturns, according to estimates from the World Bank’s Migration and Development Brief.

Remittance receipts for the Maghreb (Algeria, Morocco, and Tunisia) surged by 15.2 percent, driven by growth in Euro Area. Flows to several countries fell in 2021, including Jordan (6.9 percent decline), Djibouti (14.8 percent decline), and Lebanon (0.3 percent decline).

For the developing Mena region, remittances have long constituted the largest source of external resource flows among ODA, FDI, and portfolio equity and debt flows. The outlook for remittances in 2022 is one of slower growth of 3.6 percent due to risks stemming from Covid-19. Remittance costs: The cost of sending $200 to Mena fell to 6.3 percent in the first quarter of 2021 from 7 percent a year ago.

Remittance inflows to Sub-Saharan Africa returned to growth in 2021, increasing by 6.2 percent to $45 billion. Nigeria, the region’s largest recipient, is experiencing a moderate rebound in remittance flows, in part due to the increasing influence of policies intended to channel inflows through the banking system. Countries where the value of remittance inflows as a share of GDP is significant include the Gambia (33.8 percent), Lesotho (23.5 percent), Cabo Verde (15.6 percent) and Comoros (12.3 percent).

In 2022, remittance inflows are projected to grow by 5.5 percent due to continued economic recovery in Europe and the US. Remittance costs: Costs averaged 8 percent in the first quarter of 2021, down from 8.9 percent a year ago. Although intra-regional migration makes up more than 70 percent of cross-border migration, costs are high due to small quantities of formal flows and utilization of black-market exchange rates.

Remittances to South Asia likely grew around 8 percent to $159 billion in 2021. In India, remittances advanced by an estimated 4.6 percent in 2021 to reach $87 billion. Pakistan had another year of record remittances with growth at 26 percent and levels reaching $33 billion in 2021.

Globally, remittances to low- and middle-income countries are projected to have grown a strong 7.3 percent to reach $589 billion in 2021. This return to growth is more robust than earlier estimates and follows the resilience of flows in 2020 when remittances declined by only 1.7 percent despite a severe global recession due to Covid-19.

For a second consecutive year, remittance flows to low- and middle-income countries (excluding China) are expected to surpass the sum of foreign direct investment (FDI) and overseas development assistance (ODA). This underscores the importance of remittances in providing a critical lifeline by supporting household spending on essential items such as food, health, and education during periods of economic hardship in migrants’ countries of origin.

“Remittance flows from migrants have greatly complemented government cash transfer programs to support families suffering economic hardships during the Covid-19 crisis. Facilitating the flow of remittances to provide relief to strained household budgets should be a key component of government policies to support a global recovery from the pandemic,” said Michal Rutkowski, World Bank Global Director for Social Protection and Jobs.

Factors contributing to the strong growth in remittance are migrants’ determination to support their families in times of need, aided by economic recovery in Europe and the US which in turn was supported by the fiscal stimulus and employment support programs. In the Gulf Cooperation Council (GCC) countries and Russia, the recovery of outward remittances was also facilitated by stronger oil prices and the resulting pickup in economic activity. – TradeArabia News Service

 

Source: http://www.tradearabia.com/news/BANK_389850.html

 

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