World Bank on 13 April 2016 released 2015 Migration and Development Brief. According to it, remittances to developing countries grew only marginally in 2015.
The marginal growth in remittances was due to weak oil prices and other factors that strained the earnings of international migrants and their ability to send money home to their families.
It also highlights that the slowing in remittances growth, which began in 2012, was exacerbated in 2015 by low oil prices.
India remained the world's largest remittance recipient in 2015 despite experiencing a one billion US dollar drop from the previous year. India retained its top spot in 2015, attracting about 69 billion US dollars in remittances, down from 70 billion in 2014.
Main Highlights of the Migration and Development Brief
• Officially recorded remittances to developing countries amounted to 431.6 billion dollar in 2015, an increase of 0.4 percent over 430 billion dollar in 2014.
• The growth pace in 2015 was the slowest since the global financial crisis.
• It says that the global remittances, which include those to high-income countries, contracted by 1.7 percent to 581.6 billion dollar in 2015, from 592 billion dollar in 2014.
• Other large remittance recipients in 2015 were China, with 64 billion dollar, the Philippines (28 billion dollar), Mexico (25 billion dollar) and Nigeria (21 billion dollar).
• Egypt saw remittances contract in 2015, as flows from the GCC countries slowed considerably.
• Remittances contracted by 20 percent to countries in the Europe and Central Asia region, with the heaviest impacts on Tajikistan and Ukraine, as a struggling Russian economy, and depreciation of the Russian ruble against the dollar contributed to the decline in remittances to the region.
Forecast for Future
World Bank in its report said, remittance flows are expected to recover in 2016, after a bottoming out in 2015.
The growth will be helped with growth driven by continued economic recovery in the United States and the Euro Area, and a stabilization of US dollar exchange rates of remittance-source countries.
In addition to currency movements, oil prices are a key downside risk to this outlook. Should the price of oil suffer unexpected declines, remittances from Russia and the GCC would be further buffeted.
Regional Remittance Trends
• Among geographical regions, Latin America and the Caribbean saw the most rapid growth rate in remittances in 2015, of 4.8 percent, due to the recovery in labor markets in the United States. Growth is expected to continue in 2016, albeit at a slower pace, with remittances expected to reach 69.3 billion dollar in 2016, from 66.7 billion dollar in 2015.
• Remittances to East Asia and the Pacific rose by 4.2 percent in 2015, down from 7.4 percent in 2014. Nevertheless, the region remained the top remittance recipient amongst all geographical regions. Remittances are projected at 131 billion dollar in 2016, up from 127 billion dollar in 2015.
• Remittances to South Asia grew by 2 percent in 2015, down from 4.3 percent in 2014, due to a contraction in flows to India, the world’s largest remittance recipient, and Sri Lanka, despite a spike in remittances to Nepal in response to the earthquake. The region is expected to attract 123.3 billion dollar in remittances in year 2016, compared to 117.9 billion dollar in 2015.
• Sub-Saharan Africa saw a modest growth of 1 percent in remittances in 2015, compared to 0.2 percent in 2014. Remittances to the region are expected to increase further this year, by 3.4 percent, to 36 billion dollar, from 35.2 billion dollar in 2015.
• Remittances to the Middle East and North Africa (MENA) contracted by 0.9 percent in 2015, from 4 percent growth in 2014, largely due to a decline in inflows to Egypt, the region’s largest remittance recipient. However, remittances to the region are expected to grow by 2.6 percent this year to 51.6 billion dollar, from 50.3 billion dollar in 2015.
• Remittance flows to Europe and Central Asia were severely affected in 2015, contracting by 20.3 percent, due to the depreciation of the Russian ruble against the dollar and the slowdown in economic activity in Russia, a major source of remittances for the region. The region should, however, see a robust recovery in 2016, with remittances expected to grow by 5.1 percent to 36.3 billion dollar, from 34.6 billion dollar in 2015.
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When: 13 April 2016