Remittances from migrant workers play a serious role in their homelands’ economies, according to the World Bank, which estimates that earnings sent by migrants to low- and middle-income countries for the whole of 2022 will reach $626bn, an amount larger than the gross domestic product of Denmark or Ireland.
Money that has already been sent home by migrants this year accounts for large shares of GDP in some countries – for 38 per cent in Lebanon, 30 per cent in Kyrgyzstan and Tajikistan, 28 per cent in the Gambia, and 50 per cent in Tonga, a tiny Polynesian nation, the World Bank said in November’s issue of its Migration and Development Brief series.
Remittances generally tend to make up increasing percentages of GDP, according to the brief.
The $626bn projection is 5 per cent larger than the total amount migrants sent home in 2021, but what was remitted that year was 10.2 per cent up on 2020, the international institution said.
There were several factors behind remittance flows in 2022, including gradual economic recovery after COVID lockdowns, rising prices and currency exchange rate movements, according to the World Bank document.
Easing of COVID restrictions has meant more jobs for migrants. As the rouble went up versus the U.S. dollar early this year, larger sums were transferred from Russia to Central Asia. Conversely, less money went to North Africa and elsewhere from Europe after the euro slid against the dollar.
The $626bn estimate includes $100bn to be received by India in 2022. It would be the largest annual sum to have ever been received in remittances by a single country, according to the World Bank.
The amount, which accounts for about 3.5 per cent of India’s nominal GDP, is 12 per cent larger than was remitted to the country in 2021.
Remittances to Nicaragua for the period from January to September 2022 were 45 per cent up on the like period in 2021. This is the highest year-on-year increase in remittances both to single countries and to regions, according to the brief, but, the document said, it “was likely driven by the political situation in the country”.
SOURCE: Emerging Markets
