Publication: Outlook for Remittance Flows 2012-14 : Remittance Flows to Developing Countries Exceed $350 Billion in 2011
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2011-12-01
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2011-12-01
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Officially recorded remittance flows to developing countries are estimated to have reached $351 billion in 2011, up 8 percent over 2010. For the first time since the global financial crisis, remittance flows to all six developing regions rose in 2011. Growth of remittances in 2011 exceeded our earlier expectations in four regions, especially in Europe and Central Asia (due to higher outward flows from Russia that benefited from high oil prices) and Sub-Saharan Africa (due to strong south-south flows and weaker currencies in some countries that attracted larger remittances). By contrast, growth in remittance flows to Latin America and Caribbean was lower than previously expected, due to continuing weakness in the U.S. economy and Spain. Remittance costs have fallen steadily from 8.8 percent in 2008 to 7.3 percent in the third quarter of 2011. However, remittance costs continue to remain high, especially in Africa and in small nations where remittances provide a life line to the poor.
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“Mohapatra, Sanket; Ratha, Dilip; Silwal, Ani. 2011. Outlook for Remittance Flows 2012-14 : Remittance Flows to Developing Countries Exceed $350 Billion in 2011. Migration and Development Brief;No. 17. © World Bank. http://hdl.handle.net/10986/16182 License: CC BY 3.0 IGO.”
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Based on monthly and quarterly data released by some central banks and in line with the World Bank's global economic outlook we estimate that remittance flows to developing countries will fall to $317 billion in 2009. This 6.1 percent decline is smaller than our earlier expectation of a 7.3 percent fall. While new migration flows have fallen, existing migrants are not returning even though the job market has been weak in many destination countries. We maintain our expectation of a recovery in migration and remittance flows in 2010 and 2011, but the recovery is likely to be shallow. In all the regions, remittance flows are likely to face three downside risks: a jobless economic recovery, tighter immigration controls, and unpredictable exchange rate movements. Despite these risks, remittances are expected to remain more resilient than private capital flows and will become even more important as a source of external financing in many developing countries. Policy responses should involve efforts to facilitate migration and remittances, to make these flows cheaper, safer and more productive for both the sending and the receiving countries.Publication Outlook for Remittance Flows 2008-2010 : Growth Expected to Moderate Significantly, But Flows to Remain Resilient(World Bank, Washington, DC, 2008-11)The outlook for remittances for the rest of 2008 and 2009-10 remains as uncertain as the outlook for global growth, oil and non-oil commodity prices, and currency exchange rates. In the past, remittances have been noted to be stable or even counter-cyclical, during an economic downturn in the recipient economy, and resilient in the face of a slowdown in the source country. This time, however, the crisis has affected all countries, creating additional uncertainties.
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