Officially recorded remittance flows to low- and middle-income countries (LMICs) reached approximately $656 billion in 2023, marking a modest 0.7% growth rate from the previous year, according to the latest Migration and Development Brief from the World Bank released today.

Despite the slowdown, remittances remained a vital source of external finance for developing nations, surpassing foreign direct investment (FDI) and official development assistance (ODA).

Looking ahead, the World Bank anticipates remittances to LMICs to grow more robustly by 2.3% in 2024, although regional disparities may affect these projections. Potential risks include economic slowdowns in high-income migrant-hosting countries and volatility in oil prices and currency exchange rates.

Iffath Sharif, Global Director of the Social Protection and Jobs Global Practice at the World Bank, emphasized the role of migration and remittances in driving economic and human development. She highlighted efforts to enhance managed migration to address global demographic imbalances and labour deficits while addressing unemployment and skill gaps through targeted training initiatives.

Regional highlights from 2023 showed significant remittance growth in Latin America and the Caribbean (7.7%), South Asia (5.2%), and East Asia and the Pacific (4.8%, excluding China). In contrast, Sub-Saharan Africa experienced a slight decline (-0.3%), while the Middle East and North Africa saw a substantial drop (-15%), and Europe and Central Asia recorded a decline of 10.3%.

The report underscored ongoing challenges, including high costs of sending remittances, which averaged 6.4% for a $200 transfer globally in late 2023. Digital remittances offered a lower cost option at 5%, highlighting the benefits of technological advancements in reducing financial burdens on migrants.

Improving data collection remains crucial to support UN Sustainable Development Goals, yet gaps persist, exacerbated by informal remittance channels. The International Working Group on Improving Data on Remittance Flows (RemitStat) will release recommendations to address these challenges later this year.

Looking forward, regional projections for 2024 vary. Remittance flows are expected to rebound across many regions, supporting economic stability and development efforts in LMICs amid global uncertainties.