India to be the top recipient of remittances from its diaspora in 2017

Among major remittance recipients, India retains its top spot, with remittances expected to total $65 billion this year, followed by China ($61 billion), the Philippines ($33 billion).

MUMBAI: India is expected to retain its top spot in attracting overseas remittances from its diaspora to family back home, according to the World Bank.

Among major remittance recipients, India retains its top spot, with remittances expected to total $65 billion this year, followed by China ($61 billion), the Philippines ($33 billion), Mexico (a record $31 billion), and Nigeria (($22 billion), said a release by the multilateral agency on Tuesday.

Global remittances to low- and middle-income countries are expected to recover this year after two consecutive years of decline, says the latest edition of the World Bank’s migration and development brief, released on Tuesday.

The Bank estimates that remittances to developing countries are expected to grow by 4.8 percent to $450 billion for 2017. Global remittances, which include flows to high-income countries, are projected to grow by 3.9 percent to $596 billion.

The recovery in remittance flows is driven by relatively stronger growth in the European Union, Russian Federation, and the United States. As a result, those regions likely to see the strongest growth in remittance inflows this year are Sub-Saharan Africa, Europe and Central Asia, and Latin America and the Caribbean.

In the Gulf Cooperation Council (GCC) countries, fiscal tightening, due to low oil prices, and policies discouraging recruitment of foreign workers, will dampen remittance flows to East and South Asia.

In 2018, remittances to low- and middle-income countries are expected to rise modestly by 3.5 per cent to $466 billion. Overall global remittances is expected to rise by 3.4 percent to $616 billion in 2018.

Average cost of sending $200 remained stagnant at 7.2 percent in the third quarter of 2017, said the world bank study. This was significantly higher than the sustainable development goal (SDG) target of 3 percent. Sub-Saharan Africa, with an average cost of 9.1 percent, remains the highest-cost region.

The report noted that two major factors contributing to high costs are exclusive partnerships between national post office systems and any single money transfer operator (MTO), which stifles market competition and allows the MTO to raise remittance fees, as well as de-risking by commercial banks, as they close bank accounts of MTOs, in order to cope with the high regulatory burden aimed at reducing money laundering and financial crime.

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