| 10 | SPECIAL FEATURE Remittances to India: Up, Up and Away India remained the largest recipient of remittances, with an estimated $125 billion in 2023. A surge in the country’s high-skilled migrants and lower transactions costs through digitalisation have facilitated higher inflows. The Inflows How India Stacks Up Non-resident Deposits: A favoured route Year Remittances ($ billion) 2014 70.39 2015 68.91 2016 62.74 2017 68.97 2018 78.79 2019 83.33 2020 83.15 2021 89.38 2022 111.22 2023 125.00 2024* 135.00 SOURCE: World Bank • Note: *Forecast SOURCE: World Bank–KNOMAD staff; World Development Indicators; IMF Balance of Payments Statistics. • Note: e = estimate ($ billion, 2023e) SOURCE: Reserve Bank of India. Data are for the month of September of each year. 5 Figure 1.2 Top Recipients of Remittances among Low- and Middle-Income Countries, 2023 Source: World Bank–KNOMAD staff; World Development Indicators; IMF Balance of Payments Statistics. Note: GDP = gross domestic product; e = estimate. The United States has continued to be the largest source of remittances, followed by Saudi Arabia. As a share of GDP, however, Saudi Arabia has a significantly larger volume of outward remittances than the United States. Top remittance source countries include several countries of the Gulf Cooperation Council (GCC). However, data on outward remittances tend to overstate the size of the flows in countries that are offshore financial centers. 1.2 Moderate Growth of Remittances in 2023 Remittance flows to LMICs are estimated to reach $669 billion in 2023, exceeding the forecast given in Migration and Development Brief 38 (published in June 2023; World Bank/KNOMAD 2023), helped by a higher-thanexpected increase in flows to the South Asia and Latin America regions. The growth in remittances is estimated to have fallen to 3.8 percent in 2023, following a 7.7 percent gain in 2022, as resilient labor markets in advanced economies (especially the United States) and GCC countries continue to support remittance flows to LMICs. The robust recovery of job markets in the high-income countries of the Organisation for Economic Co-operation and Development (OECD) following the onset of the COVID-19 pandemic has been the key driver of remittances, particularly as employment growth during the recovery was more rapid for immigrants than for the native born (figure 1.3). The relative strength in remittances to the Latin America region compared to other regions can be explained by strong growth in the US labor market, the region’s main source of remittances (see figure 1.3 and section on Latin America and the Caribbean in the regional appendix to this brief). 125 67 50 40 24 24 23 21 20 16 ($billion, 2023e) 48 41 32 28 27 27 26 26 23 21 (Percentage of GDP, 2023e) Figure 3.2 A Surge in Nonresident Deposits in India, 1997–2023 Source: Reserve Bank of India. Data are for the month of September of each year. Nonresident deposit schemes are easy to implement as there is no requirement to register such programs in foreign jurisdictions. Because of that, however, such schemes cannot be actively marketed overseas. Anecdotally, countries rely on international commercial banks to mobilize nonresident deposits, but the commission paid to the banks can be exorbitant. Also, such deposits are short-term liabilities. Unlike remittances, they can be volatile and highly sensitive to international interest rate movements. As such, nonresident deposits are not appropriate tools for financing long-term development projects. 143 0 20 40 60 80 100 120 140 160 $ billion
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