The World Bank has published its latest numbers on global remittance flows, and all signs point to a strong rebound from the pandemic-induced dip we saw in 2020.
Overall, the World Bank has boosted its projections significantly from last year’s numbers. 2021 now forecast at $751bn has seen a 6% increase in total flows compared to 2020 overall, with low and middle income countries seeing a 7% increase. Most importantly, 2021 is expected to end up above the pre-pandemic levels of 2019.
This is a marked improvement on the forecasts for 2021 that the World Bank published in Q4 2020, with overall total flows for 2021 being 21% higher than the 2021 forecast a year ago, and 25% higher for low and middle income countries.
The key drivers of the rebound in 2021 were an increase in support from migrants for their families back home, particularly for countries impacted by the Delta variant, as well as exceptional emergency fiscal stimuli. Easing in countries that employ large numbers of migrants also played a role, as did higher oil prices.
Latin America and the Caribbean saw a particularly strong recovery, with 21% growth in 2021, which has been attributed to labour shortages and thus increased weekly earnings in the US, the top sending county for those regions, as well as a reopening of travel and tourism.
Projections for 2022 are forecast to see a slower increase of c.3% with flows to low and middle income countries forecast to grow at 2.6%. This is in part due to the risk in a resurgence of Covid-19 cases, which have already increased in key sending countries such as the US, Japan and much of the EU.
Poor access to vaccines in economies such as Sub-Saharan Africa have also contributed to the weaker forecast, as has the ongoing microchip shortage, resulting consumer price increases and ongoing high oil prices. 2022 is also expected to see lower remittance flows in some regions such as South Asia as a result of a reduced rate of work permit issuance in Gulf Cooperation Council countries.