Remittance to low and middle-income regions forecasted to reach $639 billion in 2023

MoneyTransfers.com has analysed global remittance data to reveal a forecasted growth in remittance to low- and middle-income countries of around $13 billion this year. Estimates for remittance flows for 2022 are around the $626 billion dollar mark for low- and middle-income countries across the world, with forecasts for 2023 at around $639 billion.

It’s also predicted that South Asia will once again be the biggest recipient of remittance inflows at around $164 billion in 2023, but this is only an increase of $1 billion from the 2022 estimate of $163 billion.

South Asia takes the top spot for the fourth year in a row, last coming second in 2019 when it received $140 billion in remittance flows, compared to the $148 billion sent to East Asia and the Pacific.

It’s thought that the likely reasons for this growth are the gradual reopening of host-country economies following the COVID-19 pandemic, improved migrant workers’ incomes, and unexpected currency fluctuations. In fact, some data suggests that migrant workers sent home an expected $794 billion in 2022.

Latin America and the Caribbean income also strong

Latin America and the Caribbean is also expected to be one of the main recipients of remittance flows in 2023, with its forecasted in-flow at around $149 billion. It’s second only to South Asia, and comes ahead of East Asia and the Pacific ($133 billion).

Outside of Asia and Latin America, numbers begin to drop off significantly - the next highest forecasted recipient in 2023 is Europe and Central Asia ($75 billion), followed by the Middle East and North Africa ($65 billion) and finally Sub-Saharan Africa ($55 billion).

Interestingly, the biggest growth in remittance is seen by the Latin America and Caribbean regions (4.7% compared to 2022 estimates), Europe and Central Asia (4.2%), and Sub-Saharan Africa (3.9%).

India the biggest recipient in 2022 with record $100 million

On an individual country level, India is once again the biggest receiver of inward remittances in the world. After analyzing historic remittance data for India and the world, MoneyTransfers.com has found that their inward remittance has set a new record at around $100 million, a rise of over 10% from their estimated 2021 income - also a record-breaking year.

The biggest contributors to India via remittance are the USA with a 23.4% share, followed by the UAE (18%) and the UK (6.8%). It’s estimated that while India tops the list by amount received, this only makes up around 2.9% of their total GDP in 2022.

This is in stark contrast to nations for which remittance makes up a significant portion of their GDP. For example, Tonga is the most reliant on inward remittances, making up almost half of their entire GDP in 2022 - ahead of Lebanon (37.8%), Samoa (33.7%) and Tajikistan (32%).

Money transfer providers cheaper than banks and post offices for remittance

According to the world remittance cost data, the average cost of remittance with a money transfer provider is around 5.2%. This is lower than both post offices (6.5%) and banks (11%) - and while it’s higher than the cost with mobile operations (3.5%), these account for less than one percent of all transactions.

To put this into perspective, the average cost of sending $200 to any region was around 6% in 2022, but this was cheapest in South Asia at a cost of around 4.1%, and most expensive in Sub-Saharan Africa at 7.8%.

The average cost of remittance rose in Latin America and the Caribbean (from 5.6% to 6%), Europe and Central Asia, and the Middle East and North Africa. However it fell in Sub-Saharan Africa, South Asia, and East Asia and the Pacific.

Remittance forms a crucial portion of total income not only for countries and GDP figures as a whole, but also for individuals and families reliant on crucial support. Money transfer providers do their bit to make remittance easier, faster and cheaper - but you have to be sure you’re finding the best deal possible for the transfer you need to make. This is where comparing your options can come in so handy.

Jonathan Mery, CEO of MoneyTransfers.com