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India Expects to Receive $100 Billion in Remittances in 2022

Dec 05, 2022

  • Supportive Measures: In the Gulf Cooperation Council (GCC) countries, governments ensured low inflation through direct support measures that protected migrants’ ability to remit.
  • Depreciation: Depreciation of the Indian rupee to the US dollar has also proven advantageous for Indian migrants and increased remittance flows.
  • Impact of Rise in Remittance

    Income: Remittances are a vital source of household income for low- and middle-income countries.

    • Gross Domestic Product (GDP): Despite reaching a historic milestone of $100 billion, India’s remittance flows are expected to account for only 3% of its GDP in 2022.

    Enhance your IAS preparation with this video on Rupee Depreciation by Vivek Singh sir:

    Performance of Other Nations

    • The overall global remittance has faced a slowdown due to the impact of an amalgam of external global shocks (inflation, slowing demand) in destination and source countries alike, as well as domestic factors.
    • The remittances to low- and middle-income countries will grow by 5% to $626 billion, despite global challenges in 2022, as per the World bank’s report.
    • The World Bank has predicted that remittance flows to South Asia this year will grow 3.5% to reach $163 billion in 2022.
    • Nepal has seen a rise of 4% in remittance, which is also considered a strong rise along with India.

    Further Predictions’ in World Banks’ Report

    • The growth of remittance flows into South Asia in 2023 is expected to slow to 0.7%. 
    • The year (2023) will stand as a test for the resilience of remittances from white-collar South Asian migrants in high-income countries.
    • Remittance flows in India, specifically, are predicted to decrease due to inflation and an economic slowdown in the United States. 
    • The decline in economic growth in the GCC coupled with a fall in oil prices will further pull remittance flows down to all South Asian countries.

    News Source: The Indian Express

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