World Bank forecasts 50% drop in remittance growth to India for 2024
PTC News Desk: The World Bank predicts that the growth in remittances to India will likely cut in half by 2024, from 7.5 per cent in 2023 to 3.7 per cent. Nonetheless, the international bank stated in its most recent Migration and Development Brief that India’s initiatives to connect its Unified Payments Interface with source nations like Singapore and the United Arab Emirates (UAE) should lower costs and expedite remittances.
Remittances to India totaled $120 billion in 2023, bolstered by robust labor markets in the US and Europe. The World Bank stated that the slowdown was caused in part by “reduced outflows from GCC (Gulf Cooperation Council) countries amid declining oil prices and production cuts.” It is anticipated that remittances will slightly increase to $124 billion in 2024 and $129 billion in 2025.
In terms of remittance recipients, India continued to be the largest, with Mexico ($66 billion), China ($50 billion), the Philippines ($39 billion), and Pakistan ($27 billion) following. República Bolivariana de Venezuela (8.9 million), China (11.1 million), Mexico (11 million), Ukraine (11.9 million), and India (18.7 million) continued to be the top emigrant origin countries.
“The distribution of India’s migrant labor force among low-skilled workers employed in GCC markets and a sizable portion of highly skilled workers employed primarily in high-income OECD (Organization for Economic Cooperation and Development) markets is likely to lend stability to migrants’ remittances in the event of external shocks,” the World Bank stated.
The international bank claimed that the February 2023 free trade agreement (FTA) has helped remittance flows to India from the UAE, which make up 18 per cent of total remittances and are the country’s second-largest source of remittances after the US.
The latter (FTA) created a framework to encourage collaboration for connecting payment and messaging systems between India and the UAE, as well as the usage of local currencies for cross-border transactions.
Utilising dirhams and rupees in international transactions plays a crucial role in directing a greater amount of remittances into official channels. 11 per cent of all remittances from India are made up of the UAE, Saudi Arabia, Kuwait, Oman, and Qatar, in addition to the former two.
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