World Bank: “Significant” growth in expatriate remittances in 2021

Migrant remittances to low- and middle-income countries are expected to grow by 7.3 percent to $589 billion in 2021, according to the latest World Bank (WB) migration note and development.

This rebound, compared to previous forecasts, confirms the strength of flows already seen in 2020, when remittances fell only 1.7% despite a severe global slowdown due to the Covid-19 pandemic, the note notes, For the second year in a row, remittances to low- and middle-income countries, in particular, are expected to exceed the sum of foreign direct investment (FDI).

This observation underscores the importance of these flows, which constitute a true “lifeline” by allowing families to finance essential products such as food, health and education during periods of economic hardship in the countries of origin of the migrants, World Bank explains.

“Migration remittances substantially complement government cash transfer programs to help families reeling from economic uncertainty during the Covid-19 crisis,” said Michal Rutkowski, global director of social security and employment at WB, quoted in the note.

He said these remittances should be a “key” part of national policies aimed at supporting a broader recovery from the pandemic, in order to relieve a strained household budget.

For the Middle East and North Africa region, migrant remittances are expected to increase by about 9.7% to $62 billion in 2021, thanks to a return to growth in the host countries. Positive impact on Gulf Cooperation Council (GCC) countries.

This increase is also due to strong growth in inflows for Egypt (12.6%, or $33 billion) and Morocco (25%, or $9.3 billion), with return migration and transit playing – respectively – a key role in these favorable results, According to the same source, remittances to the Maghreb (Algeria, Morocco and Tunisia) increased by 15.2% due to the growth of the euro area.

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As per the note, the outlook for 2022 for the sector is one of slower growth of 3.6%, due to the risks associated with COVID-19.

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