(Bloomberg) -- Global remittances will likely grow by $34 billion this year and about $31 billion in 2022, reversing last year's decline, as economies recover from the impact of the coronavirus pandemic, according to the Asian Development Bank.
Estimated remittance growth of 4.8% globally this year reflects a comparison to last year's low base, as well as migrant workers' desire to send money home to make up for foregone remittances in 2020, the ADB said in an update to publications released since the onset of the Covid-19 crisis. Growth in the money repatriated by migrant workers will slow to 4.2% in 2022 as base effects fade.
Economic contraction at the height of the pandemic led to job cuts and reduced working hours in many destination countries for overseas workers, resulting in “unprecedented” waves of returning migrants. They included almost 400,000 Filipinos and 4 million Indian nationals in 2020, with a huge majority returning from jobs in the Middle East and U.S.
Global remittances declined 2.3% in 2020, according to estimates by ADB economists.
| Recipient of Remittances | 2021 | 2022 |
|---|---|---|
| Asia Pacific | 6.7% | 5.9% |
| *South Asia | 9.4% | 7.2% |
| *Southeast Asia | 4.0% | 5.9% |
| EU+UK | 3.0% | 2.8% |
| Middle East | 0.2% | 0.4% |
| Rest of world | 3.8% | 2.9% |
| *Figures are ADB's remittance growth projections |
The ADB said the simulation assumes a “pessimistic” recovery from Covid-19 in Asia Pacific, with a resurgence expected to continue in 2022 although the cases may be 50% less than in 2021.
Even with the better outlook for this year and next, the Manila-based multilateral lender warned against the challenges faced by migrants, including changing immigration and health protocols. These could limit migration options, which could in turn breed smuggling and human trafficking, the bank said.
Governments should improve collaboration to establish flexible procedures for cross-border labor mobility, as well as ensure greater access to social protection and health services, the ADB said.
©2021 Bloomberg L.P.
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