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  • on 08.10.2014
  • at 11:00 AM
  • by Kevin Hind

Money rolls in as remittances to developing countries increase 0

Remittances by international migrants from developing countries are on course for strong growth this year, while at the same time forced migration due to violence and conflict has reached unprecedented levels, says the World Bank‘s latest issue of Migration and Development Brief.

Officially recorded remittances to developing countries are expected to reach $435 billion this year, an increase of 5 percent over 2013. The growth rate this year is substantially faster than the 3.4 percent growth recorded in 2013, driven largely by remittances to Asia and Latin America.

Remittances to developing countries will continue climbing in the medium term, reaching an estimated $454 billion in 2015.

Global remittances, including those to high-income countries, are estimated at $582 billion this year, rising to $608 billion next year.

Remittances remain an especially important and stable source of private inflows to developing countries, as they bring in large amounts of foreign currency that help sustain the balance of payments. In 2013, remittances were significantly higher than foreign direct investment (FDI) to developing countries (excluding China) and were three times larger than official development assistance.

“Remittances to developing countries grew this year by 5 percent. Remittance inflows provided stable cover for substantial parts of the import bill for such countries as Egypt, Pakistan, Haiti, Honduras, and Nepal.

India and China lead the chart with projected remittance inflows of, respectively, $71 and $64 billion in 2014. In addition, India and the Philippines benefit from having migrants with the most diverse destination spread, thereby creating buffers against regional shocks. Given the growing importance of this sector, the World Bank’s Migration and Development Brief has become an essential tool for global development policy experts,” said Kaushik Basu, Senior Vice President and Chief Economist of the World Bank Group.

The brief notes that the global average cost of sending remittances continued its downward trend in the third quarter of 2014, falling to 7.9 percent of the value sent, compared to 8.9 percent a year earlier. However, the cost of sending money to Africa remains stubbornly high, exceeding 11 percent.

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Source: World Bank Migration and Development Brief

Photo credit: Flickr  

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