India leads global remittance surge with projected 23pc increase to $125 bn in 2023

India is poised to be the top recipient of remittances globally in 2023, with an anticipated surge of over 11 per cent, reaching $125 billion, according to the World Bank's latest Migration and Development Brief reported by Moneycontrol.

This growth solidifies India's position ahead of countries like Mexico ($67 billion) and China ($50 billion). The report underscored the importance of remittances to India's economy, helping offset the impact of declining foreign direct investment and higher trade deficits.

The World Bank highlighted a global growth of approximately 3.8 per cent in remittances to low- and middle-income countries (LMICs) in 2023, totalling $669 billion. Resilient labour markets in advanced economies and Gulf Cooperation Council (GCC) countries contribute to migrants' ability to send money home.

However, the World Bank expressed concern about the risk of a decline in real income for migrants in 2024, given the backdrop of global inflation and low growth prospects.

Remittances to South Asia, estimated to grow by 7.2 per cent in 2023, reaching $189 billion, are primarily driven by remittances to India. The US remains the largest source of remittances globally, with Saudi Arabia ranking second. Factors contributing to India's robust remittance growth include declining inflation and strong labour markets in high-income source countries, particularly the US, UK, and Singapore.

The regional breakdown reveals varied trends, with remittances growing for Latin America and the Caribbean (8 per cent), East Asia and the Pacific (3 per cent), and Sub-Saharan Africa (1.9 per cent). However, flows to the Middle East and North Africa experienced a 5.3 per cent decline for the second consecutive year, primarily attributed to a sharp drop in flows to Egypt. Remittances to Europe and Central Asia also saw a dip of 1.4 per cent after substantial gains in 2022.

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