World Bank forecasts slowdown in remittances
Remittance flows to developing countries will slow in 2015 due to sluggish economic growth, according to analysis from the World Bank.
The latest Migration and Development Brief forecasts that migrants from developing countries will send a total of $435 billion home in 2015—an increase of 2% on the previous year. By comparison, in 2010–2013, the growth rate was over 7%.
Globally, remittances will reach $588 billion in 2015, an increase of 1.3% on the previous year.
The Bank cites slow economic growth in Europe and particularly Russia, weaker currencies, and low oil prices in factors contributing to the smaller increase this year.
However, remittances to developing countries are predicted to grow by 4% in 2016 to $453 billion, due to continued economic recovery in the US and Europe.
Catalina Amuedo-Dorantes has written for IZA World of Labor about positive and negative impacts of remittance flows. She writes that: “Remittances can improve the well-being of family members left behind and boost the economies of receiving countries. They can also create a culture of dependency in the receiving country, lowering labor force participation, promoting conspicuous consumption, and slowing economic growth. A better understanding of their impacts is needed in order to formulate specific policy measures that will enable developing economies to get the greatest benefit from these monetary inflows.”
Similarly, in her article on the impact of migration on families left behind, our author Sylvie Démurger argues that: “Although remittances are a potentially important means of easing family budget constraints and alleviating poverty, the most vulnerable populations may be hurt by a family member’s migration. Policymakers need to consider the specific circumstances behind the migration and of the family members in the home country.”
Download the World Bank’s Migration and Development Brief 25 here.
Related articles:
The good and the bad in remittance flows by Catalina Amuedo-Dorantes
Migration and families left behind by Sylvie Démurger
Find more IZA World of Labor articles on migration