The recent decline in remittances globally has not affected India’s position of world’s number one remittance source as Indians in foreign locations sent USD 68.9 billion back home. Behind the fact that this figure has decreased by 2.1 per cent as compared to last year, India has beaten all countries including China in remittance chart.
Various economic and global reasons has contributed in decrease of remittance across the world. In 2014, remittance grew by 3.2 per cent globally, which has retarded to growth of 0.4 per cent in 2015.
The World Bank has released a report stating that weak oil prices and stronger dollar, compared to other countries where remittance is being sent are highlighted, as the primary reasons for lower remittance. This slow growth has been recorded as the slowest ever since the recession hit the global markets in 2008-09.
“Remittances are an important and fairly stable source of income for millions of families and of foreign exchange to many developing countries. However, if remittances continue to slow, and dramatically as in the case of Central Asian countries, poor families in many parts of the world would face serious challenges including nutrition, access to health care and education,” Augusto Lopez-Claros, Director, World Bank’s Global Indicators Group, said.
Some interesting highlights from the report:
- India is the leader in receiving maximum remittance of USD 69.8 billion followed by China with USD 64 billion and Philippines with USD 28 billion
- Last year’s Nepal earthquake resulted in a significant increase (20.9 per cent) in remittance to Nepal
- Except Nepal, remittance to every Asian country decreased
- For the first time since 2009, remittance to India has dropped; and the sharpest drop was witnessed from Middle East region, due to weaker oil prices
- Bangladesh-India migration corridor has been declared as world’s 3rd largest, after Mexico-US corridor and Russia-Ukraine (for inflow/outflow of migrants)
- Remittance to Bangladesh dropped to 2.5 per cent from a high of 8 per cent in 2015; for Pakistan, it dropped to 12.85 from 16.7 per cent
- The report mentions that Digital India and Startup India mission can significantly reduce remittance costs as newer technologies are evolved
- Globally, the cost of sending USD 200 was about 7.4 per cent, which is down from 2014.
- Sub-Sahara is the most expensive place to send money, as it costs 9.5 per cent of the total cost