India's foreign remittances to hit record $58 bn: WB

While 2011 might be a year of tears for most Indian companies and consumers, for those with earning members abroad, this could turn end up as a fantastic year.

According to the World Bank, India will receive the developing world’s highest remittances of $58 billion, or 16.5 percent of the total remittances sent to developing countries, in 2011.

Earlier this week, _ Firstpost _ had, quoting a Business Standardarticle,how the depreciation of the rupee is creating big gains for families of expatriates, especially those who live in the Middle East and have families back in Kerala.

[caption id=“attachment_145636” align=“alignleft” width=“380” caption=“In spite of the economic slowdown that is dampening employment prospects for migrant workers in some high-income countries, global remittances are expected to continue growing . Reuters”]  [/caption]

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Remittances worldwide (including to high-income countries) are expected to soar to $406 billion, according to the latest issue of the bank’sMigration and Development Brief, released on Wednesday at the fifth meeting of the Global Forum on Migration and Development in Geneva.

Of course, developing countries are the biggest beneficiaries as they comprise almost 86 percent of the total remittances (about$351 billion).While China will rake in $57 billion, remittances to Mexico and the Philippines are forecast to total$24 billion and $23 billion, respectively.

And don’t expect the cookie to crumble any time soon. In spite of the economic slowdown that is dampening employment prospects for migrant workers in some high-income countries, global remittances are expected to continue growing and hit $515 billion by 2014, noted the World Bank.

Of this amount, $441 billion will flow to developing countries,“Despite the global economic crisis that has impacted private capital flows, remittance flows to developing countries have remained resilient, posting an estimated growth of 8 per cent in 2011,” said Hans Timmer, director of the bank’s Development Prospects Group.

“Remittance flows to all developing regions have grown this year, for the first time since the financial crisis,” he said.

The bank said high oil prices have helped provide a cushion for remittances to Central Asia from Russia and to South and East Asia from Gulf Cooperation Council (GCC) countries.

Also, a depreciation of currencies of some large migrant-exporting countries (including Mexico, India and Bangladesh) created additional incentives for remittances as goods and services in these countries became cheaper in US dollar terms, it said.

Bank-designated developing regions grew faster than expected by 11 percent to Eastern Europe and Central Asia, 10.1 percent to South Asia, 7.6 percent to East Asia and the Pacific and 7.4 percent to Sub-Saharan Africa, despite the difficult economic conditions in Europe and other destinations for African migrants, the bank said.

In contrast, growth in remittance flows to Latin America and the Caribbean, at 7 percent, was lower than expected due to continued weakness of the US economy, while the Middle East and North Africa, affected by civil conflict and unrest related to the ‘Arab Spring’, registered the slowest growth (2.6 percent) among developing regions, it said.

The bank expects continued growth in remittance flows going forward, by 7.3 percent in 2012, 7.9 percent in 2013 and 8.4 per cent in 2014.

Remittance flows would receive a further boost if the global development community achieves the agreed objective of reducing global average remittance costs by 5 percentage points in five years under the ‘5 by 5’ objective of the G8 and G20, the bank said.

(with inputs from Agencies)