Remittances to low- and middle-income countries reached a record high in 2018, hitting $529 billion in 2018, an increase of 9.6 percent over the previous record high of $483 billion in 2017.
According to the World Bank’s latest Migration and Development Brief, global remittances, which include flows to high-income countries, reached $689 billion in 2018, up from $633 billion in 2017.
Regionally, growth in remittance inflows ranged from almost 7 percent in East Asia and the Pacific to 12 percent in South Asia.
The overall increase was driven by a stronger economy and employment situation in the United States and a rebound in outward flows from some Gulf Cooperation Council (GCC) countries and the Russian Federation. Excluding China, remittances to low- and middle-income countries ($462 billion) were significantly larger than foreign direct investment flows in 2018 ($344 billion).
Among countries, the top remittance recipients were India with $79 billion, followed by China ($67 billion), Mexico ($36 billion), the Philippines ($34 billion), and Egypt ($29 billion).
In 2019, remittance flows to low- and middle-income countries are expected to reach $550 billion, to become their largest source of external financing.
The global average cost of sending $200 remained high, at around 7 percent in the first quarter of 2019, according to the World Bank’s Remittance Prices Worldwide database. Reducing remittance costs to 3 percent by 2030 is a global target under Sustainable Development Goal (SDG) 10.7. Remittance costs across many African corridors and small islands in the Pacific remain above 10 percent.
Banks were the most expensive remittance channels, charging an average fee of 11 percent in the first quarter of 2019. Post offices were the next most expensive, at over 7 percent. Remittance fees tend to include a premium where national post offices have an exclusive partnership with a money transfer operator. This premium was on average 1.5 percent worldwide and as high as 4 percent in some countries in the last quarter of 2018.
Remittances to Sub-Saharan Africa grew almost 10 percent to $46 billion in 2018, supported by strong economic conditions in high-income economies. Looking at remittances as a share of GDP, Comoros has the largest share, followed by the Gambia, Lesotho, Cabo Verde, Liberia, Zimbabwe, Senegal, Togo, Ghana, and Nigeria.