In 2021, remittances from labor migrants in low- and middle-income countries are projected to grow sharply by 7.3%, reaching $589 billion.
The recovery in 2021 follows the resilience of flows seen in 2020, when remittances recorded a modest 1.7% decline to $549 billion. A sharp decline in remittances in the second quarter of 2020, in the immediate aftermath of widespread lockdowns and travel bans, was followed by a recovery in flows through the second half of 2020 and continuing into 2021, the World Bank's Migration and Development Report says.
Growth in remittance flows was exceptionally strong (21.6%) in Latin America and the Caribbean. It was also strong in all other regions of the world, registering a growth of between 6% and 10% in Sub-Saharan Africa, South Asia, and the Middle East and North Africa; 5.3% in Europe and Central Asia; and 1.4% in East Asia and the Pacific, excluding China.
Remittances to Europe and Central Asia are expected to grow by an estimated 5.3% to $67 billion in 2021, driven by economic recovery in the European Union and a surge in energy prices. In 2022, the volume of transfers is expected to grow by 3.8%.
Remittances are currently the largest source of external financing in the region. In 2020 and 2021, these receipts were greater than or equal to the sum of FDI, portfolio investment and ODA. In terms of the share of GDP, remittances to the Kyrgyz Republic and Tajikistan account for more than 25%. It is expected that in 2021 the volume of remittances of labor migrants to Uzbekistan will amount to about $7.6 billion, or 11.6% of the country’s GDP.
