Global remittances have long been a hero in the developing world.
They have supported families, protected communities, and funded small businesses. In fact, remittances have even delivered a large percentage of GDP for multiple low and middle income countries (LMIC).
Despite being heralded as a lifeline in the global economy, however, remittance trends have not received the statistical analysis they deserve.
That’s why the new World Migration Report 2024 is so timely: because it spotlights the myriad ways in which the remittance industry has enriched our world.
Today, we’re going to highlight the report’s most salient points, review the impact of COVID-19 on global payments, and compare remittances to competing forms of financial aid.
Finally, we will conclude with an analysis of the challenges global remittances face in the years ahead, in light of the UN’s Sustainable Development Goals.
What Is the World Migration Report?
The World Migration Report is the main publication of the International Organization for Migration (IOM).
As an official branch of the United Nations, the IOM is an intergovernmental organization that partners with migrant workers, refugees, and internally displaced persons.
Every two years, the IOM publishes the latest edition of the World Migration Report, which compiles emerging data, research, and statistics on migrant diasporas around the world.
The World Migration Report has multiple applications, particularly in the political realm.
According to IOM Director General Amy Pope,
“The World Migration Report 2024 helps demystify the complexity of human mobility
through evidence-based data and analysis. In a world grappling with uncertainty,
understanding migration dynamics is essential for informed decision-making and
effective policy responses.”
Therefore, this publication is not only a comprehensive collection of statistics and financial figures, but a handbook world leaders can freely leverage.
The 2024 edition officially launched on May 7—it’s replete with statistics and runs nearly 400 pages in length. While the full publication covers a spectrum of migrant-related topics, this article will be focusing exclusively on the rise of global remittances over the last few years.
Global Remittances Trends and Figures
The remittance industry has shown great resilience.
They have withstood a global pandemic, outlasted rising inflation, and served countless communities in transformative ways.
However, in order to better understand the role of global remittances in the modern economy, we must study the latest literature. As detailed in the World Migration Report 2024, there are five major takeaways from the global remittance market.
1) Big Picture Data
Of all the statistics featured in the World Migration Report 2024, one is particularly impressive.
Between the years of 2000 and 2022, international remittances surged 650%. During that time, remittances grew from $128 billion a year to a whopping $831 billion.
The swelling remittance market did not stop there.
From 2021 to 2022, another $40 billion in remittance flows were added to the total. These meteoric trends explain why the remittance industry is expected to surpass $5 trillion by 2030.
Though the superabundance of remittances reaches all corners of the globe, they are especially welcome in certain regions (as we will discuss later).
2) Comparison With Other Financial Flows
Throughout the 20th century, international aid leaned on benevolent governments and investors.
Two categories of philanthropy funded low and middle income countries (LMICs): foreign direct investment (FDI) and official development assistance (ODA).
Though both efforts made great strides in helping developing nations, they have recently been dwarfed by the efforts of individual migrant workers.
In 2023, global remittances officially eclipsed FDI and ODA sent to low and middle income countries. As reflected in the IOM report, remittance flows to LMICs hit nearly $615 billion in 2022 (with FDI climbing to $519 billion and ODA reaching $242 billion, respectively).
If forecasters are correct, remittances may soon outstrip all FDI and ODA resources combined.
3) Top Remittance-Receiving and -Sending Countries
Remittances are not a competition.
Nevertheless, it’s important to know which nations are sending and receiving the most money. These findings are instrumental in identifying economic challenges and opportunities for growth.
As of 2022, the top four remittance-receiving countries are:
- India: $111.22 billion
- Mexico: $61.10 billion
- China: $51 billion
- Philippines: $38 billion
Since 2010, each of these countries have remained in the top four. However, India has recently shown the most sizable growth, rising from $83.15 billion in 2020 to over $111 billion in 2022.
Where are these funds originating? As of 2022, the top four remittance-sending countries include:
- United States: $79.15 billion
- Saudi Arabia: $39.35 billion
- Switzerland: $31.91 billion
- Germany: $25.60 billion
Since 2010, the United States has shown a gradual increase in outbound remittances—rising from $60.72 billion in 2015, to $66.54 billion in 2020, and reaching nearly $80 billion in 2022.
The majority of U.S. remittances went to Mexico (totaling a record $55.9 billion in 2022).
4) Impact of COVID-19 on Remittances
In early 2020, economic forecasters anticipated chaos for global remittances.
In fact, some prognosticators expected a devastating 20% crash in funds sent to LMICs.
Despite the doom and gloom, remittances outperformed expectations in grand fashion.
In the aptly titled Brookings Institute commentary, “Remittances: One more thing that economists failed at predicting during COVID-19,” we see that global remittances contracted a mere 2% against the 2019 record high.
Indeed, the desire to support family and friends outpaced economic contraction. In fact, remittance inflows actually grew by over 6% in Latin America and the Caribbean during 2020.
With the gift of hindsight, we can also see that the pandemic accelerated the expansion of the remittance market.
According to the World Migration Report 2024, COVID-19 ultimately encouraged “a shift from informal channels to formal channels,” which has encouraged a more accurate assessment of global remittance transactions.
Thanks to the proliferation of smartphone technology—another downstream effect of the pandemic—more consumers and SMBs can send cross-border payments than ever before.
5) Remittances by Share of GDP
Some nations are more reliant on global remittances than others.
For example, though India receives the largest amount of remittances, their inflows only account for 3.4% of their gross domestic product (GDP).
Other nations are much more dependent. For example, the top four countries most reliant on remittances include:
- Tajikistan: 51% of GDP
- Tonga: 44% of GDP
- Lebanon: 36% of GDP
- Samoa: 34% of GDP
Nations with over 20% remittance-based GDP include Kyrgyzstan, Gambia, Honduras, El Salvador and Nepal.
Though some regard these percentages as “cultivating a culture of dependency” (as stated in the IOM report), others point to the prosperity only remittances can provide.
Take Tajikistan, for example.
As one of the poorest countries in the world, remittances are an undeniable saving grace. According to the International Fund for Agricultural Development, remittances are the most important source of income for Tajik families.
Where local economies fall short, remittances can provide a reprieve.
Economic and Social Implications
Despite their success, global remittances still have room for improvement.
This is especially apparent in view of the United Nations’ Sustainable Development Goals (SDGs), which include eliminating poverty and advancing quality education.
Nevertheless, one SDG remains particularly relevant to remittances.
By 2030, SDG 10.c seeks to reduce remittance fees to less than 3% of the total transaction amount. Unfortunately, this target remains out of reach across the globe.
According to the World Migration Report 2024, the average cost of sending a payment of USD $200 was lowest in South Asia (4.6%) and highest in Sub-Saharan Africa (8%).
Globally, the median remittance fee is roughly 6.35% of the total amount, well above SDG 10.c. According to the IOM report, regions including Europe, Central Asia, the Middle East and North Africa, and Latin America and the Caribbean all hover near the 6% mark.
Still, while remittances fees remain high, they have softened over the last decade.
In 2015, Sub-Saharan Africa paid nearly 10% of the total transaction amount, while the Middle East and Asia Pacific paid over 8% during that same time. Though there is obviously a long way to go, we must celebrate these positive trends along the way.
Nevertheless, migrants must be spared the repeated injustices of paying exorbitant fees to support their families. If the United Nations’ Sustainable Development Goals are to be upheld, sweeping changes must be instituted (and instituted quickly).
UniTeller: The Global Payments Gateway
There’s no denying it: remittance statistics tell a mesmerizing story.
However, it’s important to remember that each of those statistics are not just hollow numbers. Instead, these figures embody the lived experiences of countless people around the world.
While the financials are important, the human factor remains paramount.
Indeed, global remittances are far more than a nameless, faceless financial transaction. They’re a statement of affection—a meaningful (and often recurring) sacrifice—for the people that need it most.
At UniTeller, we believe remittances are the future of the global economy. While the World Migration Report 2024 affirms this view, we are proud to witness it in action every single day.
Through our remittance brand, uLink, we curate an international money transfer platform that keeps remittances fast, affordable, and secure for all parties involved.
While advancing cross-border payment solutions and white-label digital capabilities, nothing brings us greater satisfaction than connecting families and friends around the world.
Find out how a UniTeller payment gateway can help you move money in real-time.
