Remittances to developing world to reach $414 bn this year: World Bank

Developing world to get $410 bn in remittances

India and China would account for nearly a third of total remittances of $414 billion to the developing world this year, according to the World Bank. The total remittances to the developing world this year would be 6.3 per cent higher compared to 2012. "Remittance volumes to developing countries are projected to continue growing strongly over the medium term, averaging an annual growth rate of 9 per cent to reach $540 billion in 2016," the World Bank report also said. Global remittances, including those to high-income countries, are estimated to touch $550 billion this year, and reach a record $707 billion by 2016, the report added. World Bank Senior Vice President and Chief Economist Kaushik Basu said: "Remittances act as a major counter-balance when capital flows weaken as happened in the wake of the US Fed announcing its intention to rein in its liquidity injection programme. "Also, when a nation's currency weakens, inward remittances rise and, as such, they act as an automatic stabiliser." The estimates reflect recent changes to The World Bank Group's country classifications, with several large remittance recipient countries, such as Russia, Latvia, Lithuania and Uruguay no longer considered developing countries. The top recipients of officially recorded remittances for 2013 are India (with an estimated $71 billion), China ($60 billion), the Philippines ($26 billion), Mexico ($22 billion), Nigeria ($21 billion), and Egypt ($20 billion), World Bank said. Other large recipients include Pakistan, Bangladesh, Vietnam, and Ukraine. Growth of remittances has been robust in all regions of the world, except for Latin America and the Caribbean, where growth decelerated due to economic weakness in the US. The high cost of sending money through official channels continues to be an obstacle to the utilisation of remittances for development purposes, as people seek out informal channels as their preferred means for sending money home, World Bank said. The global average cost for sending remittances is 9 per cent, broadly unchanged from 2012, it added.