India is estimated to be on top in terms of receiving remittances from its workers abroad in 2011. This will be fourth year in succession when India will pip China.
The World Bank's latest brief on ‘Migration and Development' estimates that India is likely to receive nearly $64 billion in 2011 which is nearly $2 billion more than China. India got over $54 billion in 2010 which is three per cent of its gross domestic product (GDP).
The brief has revised the flow upward for India by $5.8 billion from its earlier estimate. This is primarily due to a weak rupee and robust economic activity in the Gulf Cooperation Council countries, which are major destinations of recent migrants. India along with all South Asian countries is estimated to receive $97 billion in 2011 which is likely to grow to $122 billion in 2014.
The update has revised the estimate of remittance flow to developing countries to $372 billion from $351 billion in 2011. This shows an increase of 12.1 per cent over 2010. The growth rate of remittances was higher in 2011 than in 2010 for all regions except Middle East and North Africa where flows were moderated due to the Arab Spring.
Remittance flows to developing countries are expected to grow at 7-8 per cent annually to reach $467 billion by 2014. Worldwide remittance flows, including those to high-income countries, are expected to reach $615 billion by 2014.
However, the update has also warned about several downside risks to the outlook. Even though remittances to developing countries have recovered quickly since the crisis, they are vulnerable to uncertain economic prospects in migrant destination countries.
Persistent unemployment in Europe and the US is affecting employment prospects of existing migrants and hardening political attitudes toward new immigration and have created political pressures to reduce the current levels of immigration. There are risks that if the European crisis deepens, immigration controls in these countries could become even tighter.
Volatile exchange rates and uncertainty about the direction of oil prices also present further risks to the outlook for remittances. A deepening and spread of the European debt crisis will also pose risks for oil prices, which could in turn reduce demand for migrant workers and depress remittances flows to Asian countries.