Virendra Pandit
New Delhi: With an estimated inflow of remittances worth USD 129 billion in 2024, India has topped the world, the World Bank said on Thursday.
The growth rate of remittances this year is estimated to be 5.8 percent, compared to 1.2 percent in 2023, the media reported.
India was the topmost recipient of remittances in 2024 with an estimated inflow of USD129 billion, followed by Mexico (USD 68 billion), China (USD 48 billion), the Philippines (USD 40 billion), and Pakistan (USD 33 billion), driven by a recovery in the job markets in high-income countries, a blog post by World Bank economists Dilip Ratha, Sonia Plazaeung and financial analyst Ju Kim said on Wednesday, according to the media reports.
“The recovery of the job markets in the high-income countries of the Organization for Economic Co-operation and Development (OECD), following the onset of the pandemic, was the key driver of remittances,” it said.
Officially recorded remittances to low-and middle-income countries (LMICs) are expected to reach USD 685 billion in 2024.
The remittances continued to outpace other types of external financial inflows to low- and middle-income countries and will continue to increase because of enormous migration pressures driven by demographic trends, income gaps, and climate change.
The gap between remittances and Foreign Direct Investment (FDI) is expected to widen further in 2024. In the past decade, remittances increased by 57 percent, while FDI declined by 41 percent, the World Bank said.
“Countries need to take note of the size and resilience of remittances and find ways to leverage these flows for poverty reduction, financing health and education, financial inclusion of households, and improving access to capital markets for state and non-state enterprises.”
Remittance flows to South Asia are expected to register the highest increase in 2024, at 11.8 percent, driven by continued strong flows to India, Pakistan, and Bangladesh, the blog post added.