Sharp slide in India’s remittance inflows on OECD slowdown

Subject : Economy

Section: External Sector

Context: Dip in remittances

Details:

As per the latest Migration and Development Brief released by the World Bank. After growing over 24 per cent to post a record-high level of $111 billion in 2022, remittance flows to India are expected to grow by only 0.2 per cent in 2023, Remittances are likely to get affected by slower growth in the OECD (Organisation for Economic Co-operation and Development) economies limiting employment and wage gains for migrants along with a diversion of formal remittances toward informal money transfer channels.
Remittances are likely to get affected by slower growth in the OECD (Organisation for Economic Co-operation and Development) economies limiting employment and wage gains for migrants along with a diversion of formal remittances toward informal money transfer channels.
In 2022, India posted an over 24 per cent growth in its inward remittances to reach $111 billion, higher than the World Bank’s earlier estimate of $100 billion.
This represented 63 per cent of South Asia’s remittance flows, which grew by over 12 per cent in 2022 to reach $176 billion.
Almost 36 per cent of India’s remittances are attributable to the high-skilled and largely high-tech Indian migrants in three high-income destinations (United States, United Kingdom, and Singapore), where the post-pandemic recovery led to a tight labour market and wage hikes that boosted remittances