Market Desk (Economy): The World Bank says the war in Ukraine could slow the growth of expatriate incomes in lower and middle-income countries by half of the previous year.
Officially recorded remittance flows to low and middle-income countries (LMICs) are expected to increase by 4.2% this year to reach $630bn. This follows an almost record recovery of 8.6% in 2021, according to the World Bank’s latest Migration and Development Brief released today.
Remittances to Ukraine, which is the largest recipient in Europe and Central Asia are expected to rise by over 20% in 2022. However, remittance flows many Central Asian countries for which the main source is Russia, will likely fall dramatically. These declines, combined with rising food, fertilizer and oil prices are likely to increase risks food security and poverty in many of these countries.
“The Russian invasion of Ukraine has triggered large-scale humanitarian, migration and refugee crises and risks for a global economy that is still dealing with the impact of the pandemic,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank. “Boosting social protection programs to protect the most vulnerable including Ukrainians and families in Central Asia affected by the war’s economic impact. It is a key priority to protect people from the threats of food insecurity and rising poverty.”
During 2021, remittance inflows saw strong gains in Latin America and the Caribbean (25.3%), Sub-Saharan Africa (14.1%), Europe and Central Asia (7.8%), the Middle East and North Africa (7.6%) and South Asia (6.9%). Remittances to East Asia and Pacific fell by 3.3%; although excluding China, remittances grew 2.5%. Excluding China, remittance flows have been the largest source of external finance for LMICs since 2015.
The top 5 recipient countries for remittances in 2021 were India, Mexico, China, the Philippines and Egypt. Among economies where remittance inflows stand at very high shares of GDP are Lebanon (54%), Tonga (44%), Tajikistan (34%), Kyrgyz Republic (33 %) and Samoa (32%).
In South Asia, expatriate income fell the most by 23% in 2021 due to the extreme economic and political crisis in Sri Lanka. At
According to the report, Bangladesh has become the seventh largest expatriate country in the world in 2021.