According to the latest data from the World Bank, India has become the world's largest remittance receiving country with an estimated remittance of $129 billion in 2024. It is followed by Mexico ($68 billion), China ($48 billion), Philippines ($40 billion) and Pakistan ($33 billion).

Rapid increase in remittances

Remittance growth is expected to be 5.8 percent in 2024, compared to just 1.2 percent in 2023. This growth is driven by the recovery of the global job market, especially after the COVID-19 pandemic, and the increase in employment of workers from OECD countries. The number of foreign-born workers in the US is 11 percent higher than pre-pandemic levels.

Good news for low and middle-income countries

Remittances to low and middle-income countries (LMICs) are expected to reach $685 billion in 2024. This is a key indication that remittances now exceed other forms of financial flows, and factors such as demographic changes, income inequalities, and climate change will drive this growth further.

Remittance will also outpace FDI

Remittances have grown by 57 percent in the last decade, while foreign direct investment (FDI) has declined by 41 percent. The report says that the gap between remittances and FDI will increase further in 2024, making it more important.

Remittance emphasis in India, Pakistan and Bangladesh

South Asia is projected to see the highest growth in remittances in 2024 at 11.8 per cent, driven by continued strong remittance flows to countries such as India, Pakistan and Bangladesh. This pace is linked to the income generated by migrant workers, who are strengthening the economic condition of families.

Benefits of Remittance

According to the World Bank report, countries should focus on the size and resilience of remittances. This can help in poverty alleviation, funding for health and education, financial inclusion of families and improving government and private sector access to capital markets.

It is worth noting that remittance has now become an important financial source for countries around the world. India as well as other countries need to use it properly in their development plans.