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India tops the list of recipient countries for remittances in 2024 with an estimated inflow of $129 billion, followed by Mexico ($68 billion), China ($48 billion), the Philippines ($40 billion), and Pakistan ($33 billion), according to the latest figures compiled by World Bank economists. 

The growth rate of remittances this year is estimated to be 5.8 per cent, compared to 1.2 per cent registered in 2023, according to a World Bank blog post

“The recovery of the job markets in the high-income countries of the Organization for Economic Co-operation and Development (OECD), following the onset of the COVID-19 pandemic, has been the key driver of remittances. This is especially true for the United States where the employment of foreign-born workers has recovered steadily and is 11 percent higher than the pre-pandemic level seen in February 2020,” the report said.

Officially recorded remittances to low-and middle-income countries (LMICs) are expected to reach $685 billion in 2024, it further stated.

The blog post said remittances have continued to outpace other types of external financial flows to low- and middle-income countries and will continue to increase because of enormous migration pressures driven by demographic trends, income gaps, and climate change.

It is notable that remittances have continued to outpace other types of external financial flows to low- and middle-income countries. Remittances have even surpassed FDI significantly. The gap between remittances and FDI is expected to widen further in 2024, the report pointed out.

During the past decade, remittances increased by 57 percent, while FDI declined by 41 percent. Remittances will likely continue to increase because of enormous migration pressures driven by demographic trends, income gaps, and climate change, the World Bank report explained.

“Countries need to take note of the size and resilience of remittances and find ways to leverage these flows for poverty reduction, financing health and education, financial inclusion of households, and improving access to capital markets for state and non-state enterprises,” the blog said.

Remittance flows to South Asia are expected to register the highest increase in 2024, at 11.8 per cent, driven by continued strong flows to India, Pakistan, and Bangladesh, the blog post by economists Dilip Ratha, Sonia Plazaeung and financial analyst Ju Kim said.