India leads remittance inflows at $129 bn in 2024: Who else is in the top five?

Like last year, India has been ranked top among the big recipients of remittances, though recording a mild 3.2% surge to $129 billion in 2024 compared to $125 billion in 2023, according to the World Bank's latest data. The surge in remittances comes amid a significant growth rate in remittances in 2024 globally at 5.8%, up from 1.2% in 2023.

Along with India, the top five recipient countries for remittances in 2024 are Mexico ($68 billion), China ($48 billion), the Philippines ($40 billion), and Pakistan ($33 billion). Driven mainly by continued strong flows to India, Pakistan, and Bangladesh, remittance flows to South Asia registered the highest increase in 2024 at 11.8%, region-wise.

In smaller economies, remittance inflows represent very large shares of gross domestic product (GDP) -- like Tajikistan (45% of GDP), followed by Tonga (38%), Nicaragua (27%), Lebanon (27%), and Samoa (26%) -- highlighting the importance of remittances for funding the current account and fiscal shortfalls, says the World Bank.

Officially recorded remittances to low- and middle-income countries are expected to reach $685 billion in 2024. The true size of remittances, including flows through informal channels, is also believed to be even larger, says the World Bank.

Explaining reasons for a surge in remittances, the World Bank says the recovery of the job markets in the high-income countries of the Organisation for Economic Co-operation and Development (OECD), following the onset of the COVID-19 pandemic, has been the key driver of remittances. This is especially true for the United States where the employment of foreign-born workers has recovered steadily and is 11% higher than the pre-pandemic level seen in February 2020.

The World Bank predicts that in the wake up of a strong job market in the United States, remittances will continue to flow to Mexico and Guatemala in part due to the considerable number of transit migrants passing through these countries (notably from Cuba, China, Ecuador, Haiti, India, Nicaragua, and Venezuela, according to data from the US Customs, Border and Protection).

Remittances have continued to outpace other types of external financial flows to low- and middle-income countries. They have even surpassed FDI significantly, with the gap between remittances and FDI expected to widen further in 2024. "During the past decade, remittances increased by 57%, while FDI declined by 41%."

The World Bank says remittances will likely continue to increase because of enormous migration pressures driven by demographic trends, income gaps, and climate change. "Countries need to take note of the size and resilience of remittances and find ways to leverage these flows for poverty reduction, financing health and education, financial inclusion of households, and improving access to capital markets for state and nonstate enterprises."