India remains on top with $125 bn inward remittances

India continues to be the largest recipient of overseas remittances, with inward flow of $125 billion in 2023, a 12.3 per cent surge, as the Indian diaspora’s support to families back home continued to boost the country's foreign exchange reserves.

Not just India, South Asia as a whole continued its position as the top recipient region while the Middle East and North Africa saw a decline in remittance flows for a second consecutive year, according to the World Bank’s latest Migration and Development Brief.

This year, the top five remittance recipient countries include Mexico (67 billion), China (50 billion), the Philippines ($40 billion), and Egypt ($24 billion), said the report, raising awareness about the potential impact of global economic conditions on remittance flows.

In 2022, the top five recipients of remittances were India (receiving $111 billion), Mexico ($61 billion), China ($51 billion), the Philippines ($38 billion), and Pakistan ($30 billion).

Remittances to low- and middle-income countries (LMICs) grew at a slower 3.8 per cent to $669 billion in 2023, marking a decline in real income for migrants in 2024 amidst global inflation and low growth prospects, says the report.

Remittance inflows to Latin America and the Caribbean grew 8 per cent while that to South Asia rose 7.2 per cent, East Asia and the Pacific by 3 per cent, and Sub-Saharan Africa by 1.9 per cent. Flows to the Middle East and North Africa declined by 5.3 per cent, falling for the second year, mainly due to a sharp drop in flows to Egypt. Remittances to Europe and Central Asia also fell by 1.4 per cent after gaining more than 18 per cent in 2022.

The remittances flowed mainly from advanced economies, mainly the United States, and Gulf Cooperation Council (GCC) countries.

The United States continued to be the largest source of remittances.

Based on the trajectory of weaker global economic activity, World Bank expects growth of remittances to LMICs to soften further to 3.1 per cent in 2024. 

Also, the rising cost of remittance costs, which is estimated at 6.2 per cent on average to send $200, could further dampen fund flows, according to the Bank.