Migrant workers boosted cash transfers home in 2021

Driven by a desire to help relatives dealing with the Covid-19 pandemic, migrants ramped up money transfers to low- and middle-income countries, and remittances overall are expected to rebound 7.3 percent to $589 billion in 2021, far higher than previously estimated, according to a new report.

That comes after a modest 1.7 percent drop in 2020, and, excluding China, remittances have exceeded foreign aid and direct investment in low- and middle-income countries for the past two years, the Washington-based development lender said.

Those flows are expected to rise to $605 billion in 2022, "providing a critical lifeline" for households in the countries, especially during times of economic hardship.

In 2009 in the aftermath of the global financial crisis, remittances fell 5.1 percent, but over the past two years they have been supported by government stimulus payments during the pandemic.

"Facilitating the flow of remittances to provide relief to strained household budgets should be a key component of government policies to support a global recovery from the pandemic," said Michal Rutkowski, World Bank global director for Social Protection and Jobs.

Latin America is expected to see the biggest gain, rising 21.6 percent to a new high of $126 billion, followed by the Middle East and North Africa and South Asia, according to the report.

Flows to Sub-Saharan Africa should increase 6.2 percent to $45 billion, the bank estimated.

However, the bank warned that a resurgence of Covid-19 cases and the end of government aid payments could undermine remittances.