Remittances from the UAE are on track to record 15 per cent growth in 2012 to US$12.87 billion, surpassing the overall GCC growth rate in outflows at 12.57 per cent.
Y. Sudhir Kumar Shetty, chief operating officer — Global Operations, UAE Exchange, said while remittances from the UAE are estimated to rise from US$11.19 billion to US$12.874 billion in 2012, money transferred by expatriates from across the GCC rose to US$82.96 billion from US$73.69 billion.
India, given the strong population of its nationals working in the region, retained its rank as the number one recipient of remittances from the region.
In worldwide remittances too, India with an expatriate population of over 20 million across the globe, maintained its lead by accounting for US$70 billion.
“Money remitted by foreign workers in the GCC to India, at an estimated US$30 billion, accounts for a bulk of this transaction in 2012,” said Shetty. “Our estimates suggest that inflows into Indian recorded a 15 per cent growth in 2012, mainly due to a steep depreciation of up to 18 per cent in the rupee value,” said Shetty.
He said another reason for the record outflow of remittances to India was the attractive interest rates and other investments schemes offered by Indian banks.
Worldwide remittances, including those to high-income countries, are expected to total US$534 billion in 2012, and projected to grow to US$685 billion in 2015, according to the latest issue of the Bank’s Migration and Development Brief.
The top recipients of officially recorded remittances for 2012 are India (US$70 billion), China (US$66 billion), the Philippines and Mexico (US$24 billion each), and Nigeria (US$21 billion). Other large recipients include Egypt, Pakistan, Bangladesh, Vietnam, and Lebanon.
According to the report, inflows to the Middle East and North Africa region are expected to increase by 6.3 per cent in 2012 and inflows to South Asia are expected to increase by 17.7 per cent. “Assuming an even split between the population from the two regions in the Gulf, we can assume a growth rate of 12 per cent,” said Shetty.
Officially recorded remittances to developing countries are expected to reach US$406 billion in 2012, up by 6.5 per cent from US$381 billion in 2011. The true size of remittance flows, including unrecorded flows through formal and informal channels, is believed to be significantly larger. Compared to private capital flows, remittance flows have shown remarkable resilience since the global financial crisis, registering only a modest fall in 2009, followed by a rapid recovery.
Driven primarily by strong economic activity in the GCC countries South Asia, the Middle East and North African saw the strongest growth in inward money transfers. For South Asia, remittances in 2012 are expected to total US$109 billion, an increase of 12.5 per cent over 2011; East Asia and Pacific region, is estimated to attract US$114 billion, an increase of 7.2 per cent over 2011; while Mena is expected to receive US$47 billion, an increase of 8.4 per cent over the previous year.
A recovering economy and moderately improving labour market helped to boost remittances from GCC countries. Strong oil prices and major infrastructural projects have also encouraged outward remittances from the GCC countries, said Shetty.
The GCC states continue to diversify their economies into various new sectors including tourism, finance and infrastructure in order to reduce the dependence on oil. Apart from these ongoing projects, most of the GCC states have announced major plans for converting their countries into world-class hubs. Around US$1.5 trillion worth of investments were planned for the second decade of the millennium in the region.
As per the World Bank estimates, the growth of remittances is expected to be stronger during 2013-15. The growth of flows remains robust in regions that rely on remittance flows from the US, the GCC, and Russia. Increasingly harsh policies hostile towards migrants in many destination countries, especially Europe, however, could discourage the flow of migrants in the future and subsequently weaken remittance flows.
From: Khaleej Times