A total of $540 billion in remittances was sent to low- to middle-income nations in 2020, which was 1.6 percent lower than 2019’s total and a smaller decline than predicted, the release stated.
It’s a smaller decline than the one resulting from the 2009 global financial crisis, nearly 5 percent. And it’s much lower than the decline in foreign direct investment (FDI) flows to low- and middle-income nations, which — excluding funds going to China — dropped more than 30 percent last year, according to the release.
That means remittance flows to low- and middle-income countries were higher than FDI ($259 billion) and overseas development assistance ($179 billion) combined last year, the release stated.
“The main drivers for the steady flow included fiscal stimulus that resulted in better-than-expected economic conditions in host countries, a shift in flows from cash to digital and from informal to formal channels, and cyclical movements in oil prices and currency exchange rates,” the World Bank said in the release. “The true size of remittances, which includes formal and informal flows, is believed to be larger than officially reported data, though the extent of the impact of COVID-19 on informal flows is unclear.”
Remittances rose in Latin American and the Caribbean by 6.5 percent, in South Asia by 5.2 percent, and in the Middle East and North Africa by 2.3 percent, according to the release.
Remittances fell by 12.5 percent in Sub-Saharan Africa, 9.7 percent in Europe and Central Asia and 7.9 percent in East Asia and the Pacific, the release stated.
Sub-Saharan Africa remittances fell in large part due to a 28 percent drop in remittances to Nigeria. But without Nigeria in the equation, that part of Africa saw its remittances increase by 2.3 percent, according to the release.
Global growth is expected to rebound this year and next year, sending these remittance figures even higher. There is 2.6 percent growth projected in 2021 and 2.2 percent in 2022, the release stated.
As PYMNTS reported earlier this month, Mexican workers sent a record amount of cash home in March, with remittances hitting $4.15 billion, a 2.6 percent increase over March 2020.