India, China, Mexico, Philippines, Poland – top five recipients 13 November. The World Bank has published a new report on remittances flows for 2008-2010. Officially recorded remittance flows to developing countries are estimated to reach $283 billion in 2008, up 6.7% from $265 billion in 2007. However, in real terms, remittances are expected to fall from 2 percent of GDP in 2007 to 1.8 percent in 2008. This decline is smaller than that of private or official capital flows, implying that remittances are expected to remain resilient relative to many other categories of resource flows to developing countries.
The authors of the study consider that after several years of strong growth, remittance flows to developing countries began to slow down significantly in the third quarter of 2008 in response to a deepening global financial crisis.
In 2009, remittances are expected to fall by 0.9% or at the worst case, no more than 6%.
Migration flows from developing countries may slow as a result of the global growth slowdownm but the stock of international migrants from developing countries is unlikely to decrease. Remittance flows from the Golf Cooperation Council countries (Arabian Peninsula) are likely to fall more than those from the US and Europe, affecting recipient countries in the Middle East an North Africa and south Asia.
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.
According to the new estimates, India, China and Mexico are likely to maintain their position as the top 3 recipients of remittances among developing countries in 2008.
The top 10 recipients list also includes Philippines, Poland, Nigeria, Romania, Egypt, Bangladesh and Pakistan.
In contrast, the top recipients in terms of the share of remittances in GDP included many smaller economies such as Tajikistan (45%), Moldova (38%), Tonga (35%), Lesotho (29%), and Honduras (25%).