This return to growth is more robust than earlier estimates and follows the resilience of flows in 2020 when remittances declined by only 1.7 percent despite a severe global recession due to COVID-19, according to estimates from the World Bank’s Migration and Development Brief released today.

For a second consecutive year, remittance flows to low- and middle-income nations (excluding China) are expected to surpass the sum of foreign direct investment (FDI) and oversees development assistance (ODA). This underscores the significance of remittances in providing a critical lifeline by supporting household spending on essential items such as food, health and education during periods of economic hardships in migrants´ countries of origin.

The value of remittances as a share of GDP exceeds 20% for several smaller economies: El Salvador (26.2%), Honduras (26.6%), Jamaica (23.6%), and Guatemala (18%).

The economic recovery reported in Europe and the United States, fiscal stimulus and employment promotion programs contributed to increasing remittances by migrants, said the World Bank.

Remittance flows into Latin America and the Caribbean will likely reach a new high of $126 billion in 2021, registering a solid advance of 21.6%, followed by the Middle East, North Africa, South Asia, Sub-Saharan Africa, Europe and Central Asia.

In 2022, remittances are expected to grow at 4.4 percent, mainly due to a weaker growth outlook for the United States. Remittance costs: Sending $200 to the region cost 5.5 percent on average in the first quarter of 2021, down from 6 percent a year earlier. Mexico remained the least expensive recipient country in the G20 group, with costs averaging 3.7 percent. But remittance costs are exorbitant in smaller corridors.

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