This edition also revises upward the growth of remittance flows in 2022, which increased by 8% to US$647 billion. In the post COVID-19 pandemic period, when economic growth has been lower and there has been less foreign direct investment, remittance inflows have become more important for countries and households, given their resilience as a source of external financing, especially for low- and middle-income countries with a high level of external debt.

"Remittances significantly complement government cash transfers and are critical for households in times of need", said Michal Rutkowski, global director of the World Bank's Social Protection and Labor Global Practice. "The World Bank is leading analytical and operational work on global migration to facilitate remittance flows and reduce costs".

During 2022, remittances were boosted by high oil prices in the Gulf Cooperation Council (GCC) countries, which boosted migrants' incomes; large money transfers from the Russian Federation to countries in Central Asia; and strong labor markets in the United States and advanced economies to which migrants go. By region, remittance inflows increased by 0.7% in East Asia and the Pacific, 19% in Europe and Central Asia, 11.3% in Latin America and the Caribbean, 12.2% in South Asia, and 6.1% in Sub-Saharan Africa. In contrast, in the Middle East and North Africa region, remittance inflows fell by 3.8%.

The top five remittance-receiving countries in 2022 were India (USD 111 billion), Mexico (USD 61 billion), China (USD 51 billion), the Philippines (USD 38 billion) and Pakistan (USD 30 billion).

Globally, the average cost of sending USD 200 was 6.2% in Q4 2022, up slightly from 6% a year earlier and more than double the Sustainable Development Goals target of 3%, according to the World Bank's Global Remittance Pricing Database. Banks are the most expensive means of sending remittances, with an average cost of 11.8%, followed by post offices (6.3%), money transfer operators (5.4%) and cell phone operators (4.5%). Although cell phone transactions are the cheapest, they account for less than 1% of the total transaction volume.

Remittance flows to Latin America and the Caribbean increased by 11.3% to USD 145 billion in 2022, helped by the strong US labor market. Flows to Mexico increased by 12.9% to USD 61.1 billion. Remittance growth varied widely by country, with an increase of 50% in Nicaragua, 18% in Guatemala, 17.8% in Honduras and 9.7% in Colombia.

Remittances are expected to increase by 3.3% in 2023. However, considering that the outlook is closely linked to what happens in the slowing US economy, the risks are tilted to the downside. The cost of sending $200 to the region averaged 5.8% in the fourth quarter of 2022, up from 5.6% a year earlier.

Translated by: A.M