Remittances to developing countries to witness an increase in 2016

24/10/2016 05:24 AST

According to Xpress Money, one of the world’s most dependable money transfer brands, the remittance industry is possibly one of the few industries that posts year on year growth, despite global market conditions. In 2008, when the world faced an economic meltdown, the remittance industry remained resilient and since 2010, the remittance industry has posted a positive 3.8% year-on-year growth.

The latest World Bank report states that remittance growth to emerging markets has slowed in 2016 but has continued to hold its own for the year even in the face of market uncertainty. Remittances to low and middle-income countries (LMICs) are projected to hit $442 billion in 2016 – an increase of 0.8% over the previous year.1 Remittance outflows from the MENA region are also expected to edge ahead by 1.6% for 2016 year despite cyclically low oil prices.

The remittance industry is one of the few industries that has posted nominal growth despite gloomy economic data. For instance, container traffic – considered a proxy for trade growth – has flat lined in 2016, with 10 of the world’s top 30 ports reporting a decline in traffic.2 Similarly, the World Trade Organisation (WTO) is estimating that global trade growth is at its lowest levels since the financial crisis in 2009.3 Global retail too is being hit, despite low oil prices reducing goods manufacture and transport costs4.

“It is heartening to see that economic challenges haven’t entirely stopped the growth of remittances. The remittance sector is holding on even as other market economic indicators register quite mixed readings. This is good news, because remittances are a powerful force for income equality, and help raise income levels, quality of life, and economic activity in emerging markets. They make families and communities more prosperous, and help people pull themselves out of poverty,” says Sudhesh Giriyan, COO of Xpress Money.

India, China, the Philippines, Mexico and Pakistan lead the mid-2016 table of remittance recipients among LMICs. Nepal heads the table for countries most reliant on remittances to bolster GDP, followed by Liberia, Tajikistan, Kyrgyz Republic and Haiti.

The Gulf Today