WASHINGTON: Money transfers to poor and developing countries hit a fresh record in 2018 and should become their largest source of external financing this year, the World Bank said on Monday.
But many banks and money transfer operators charged too much, cutting into the gains of migration, the bank said in a statement, report agencies.Migrant workers and others sent home an estimated US$529 billion to low- and middle-income countries last year, up 9.6 per cent from the year before, which had also been a record. Such money transfers should hit US$550 billion this year, making them the largest source of external finance, according to the bank.
Money transfers were up 12 per cent to US$131 billion for South Asia and almost seven percent for East Asia, reaching US$143 billion. Sub-Saharan Africa saw a 10 per cent increase at US$46 billion, according to the bank.
The United States economy grew strongly while outbound flows from Gulf countries and Russia also rose, according to the bank, which said explained much of the gains. Excluding China, the remittances amounted to US$462 billion, significantly more than foreign direct investment over the period, which stood at US$344 billion.