The flows of remittances toward Latin America and the Caribbean slowed down last year, although they still rose 7.7% compared to 2022, while remittances to the Middle East and North Africa plummeted 14.8%, according to data published this Wednesday by the World Bank (WB). .
After a period of strong growth during 2021-2022, recorded remittance flows to low- and middle-income countries moderated in 2023 and grew by only 0.7%, reaching approximately US$656 billion, according to the latest Migration Report and Development of the organism.
Looking ahead, remittances to low- and middle-income countries are expected to grow at a faster pace in 2024, projected to increase by 2.3%, although this growth will be uneven across regions.
Additionally, there are potential downside risks to these estimates including weaker-than-expected economic growth in high-income countries hosting migrants and volatility in oil prices and exchange rates.
In 2023, remittance flows increased further towards Latin America and the Caribbean (7.7%), followed by South Asia (5.2%) and Eastern Asia and the Peaceful (4.8%, excluding China).
Sub-Saharan Africa saw a slight drop of 0.3%, while the Middle East and North Africa saw a drop of almost 15% and Europe and Central Asia saw a drop of 10.3%.
In more detail, in Latin America and the Caribbean US$ 156,000 million were reached, with an increase of the aforementioned 7.7%, thanks to “a strong US labor market“the World Bank noted.
Mexico received US$66.2 billion, an increase of 7.8%, maintaining its position as the main recipient in the region.
By 2025, flows are expected to slow to 2.7%, although flows will continue “due to the considerable number of migrants in transit stranded in Mexico and Guatemala and the good job prospects in the United States and Spain.”
Migrants in transit from Cuba, China, Ecuador, Haiti, India, Nicaragua, Venezuela and other nations who pass through Guatemala and Mexico on their way to the United States represent the large flows of remittances to those two transit countries.
However, there are downside risks to the projections, including a projected weakening of the US labor market and the electoral results of the November election, which could bring “stricter immigration regulations”.
In the Middle East and North Africa, remittances fell by 15% to US$55 billion in 2023, mainly due to a sharp decline in flows to Egypt.
The outlook will be affected by the difficult situation faced by oil-importing countries in the region, such as Egypt, Jordan, Lebanon, Morocco and Tunisia, the agency explained.
Instead, oil exporters in the region, such as Iraq and Algeria, will benefit from rising hydrocarbon prices.
Remittance flows to the region are expected to register a moderate increase of 4.3% in 2024.
The World Bank also noted that sending remittances continues to be “too expensive” and that in the fourth quarter of 2023 the global average cost of sending US$200 was 6.4% of the amount sent, slightly higher than the 6.2% of the previous year and well above above the Sustainable Development Goals target of 3%.
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Source: Gestion
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