In the post-COVID era, global remittance flows to low-and middle-income countries have witnessed a slower growth rate. Out of the top ten remittance recipients worldwide, five countries experienced a decrease in incoming payments. However, India stands out as one of the leading countries in both total remittances received and the significant increase in remittance payments in 2022 compared to the previous year.
According to estimates by the World Bank, remittances to low- and middle-income countries rose by 8 per cent between 2021 and 2022. The total global remittance amount is expected to reach $647 billion in 2022, up from $599 billion in the previous year and $542 billion in 2020.
While some nations observed a decline in remittance inflows, India emerged as a strong contender in terms of both overall remittance receipts and growth rate. With a remarkable increase of 19.6 per cent in remittance payments in 2022 compared to 2021, India solidified its position as one of the top remittance recipients globally.
Mexico, another developing nation, also witnessed a significant rise in remittance payments, with an increase of 11.5 per cent in 2022. Similarly, Guatemala experienced a notable growth rate of 15.4 per cent during the same period.
India’s consistent growth in remittance inflows highlights the vital role played by its diaspora in supporting the country’s economy. The country has established itself as a significant destination for remittances, showcasing the trust and confidence of the Indian diaspora in contributing to the welfare of their families and the nation’s economic development.
The World Bank’s ranking also sheds light on the countries that heavily rely on remittance inflows. Tajikistan emerged as the most reliant nation, with remittances accounting for a staggering 51 per cent of its GDP. Tonga, Lebanon, and Samoa followed closely, with remittances representing 44 per cent, 36 per cent, and 34 per cent of their respective GDPs.
The decrease in remittance payments for some countries can be attributed to various factors. Egypt, for example, witnessed a decline of more than 11 per cent in remittance payments, primarily due to reduced inflows from Ukraine caused by the return of Ukrainian workers to serve in their armed forces. However, other countries in the region experienced a surge in remittances due to the outflow of money from Russia as a result of relocations and the appreciation of the ruble driven by high commodity prices.
The growth in remittance inflows to India reflects the resilience and determination of its diaspora to support their families and contribute to the country’s economic stability. Remittances play a crucial role in poverty reduction, household welfare, and overall economic development in many developing nations, including India.
As the global remittance landscape continues to evolve, India’s consistent growth in remittance inflows positions it as a significant player in the global economy. The Indian government, recognizing the importance of remittances, continues to create an enabling environment to facilitate secure and cost-effective remittance transfers, further enhancing the benefits derived from this vital source of income.
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