The amount of money Bangladeshi migrant workers sent home in 2021 grew by 2.2% to $22 billion, but according to the World Bank’s latest report, it may drop to 2% this year.
The global lender released its "Migration and Development Brief" forecast on Wednesday, where it was found that during last year's remittance growth in South Asia, Bangladesh ranked third on the list after India and Pakistan.
In 2021, remittance flows to India and Pakistan grew by 8% and 20%, respectively.
Bangladesh has been ranked seventh among the top 10 low-and middle-income remittance recipient countries in the world for 2021.
The index said that remittances, one of the main strengths of Bangladesh's economy, will not grow much this year.
According to the report, remittance inflows increased by 24% in April, ahead of Eid-ul-Fitr.
But before Eid, growth in the index slowed for eight consecutive months.
All in all, Bangladesh's remittances are expected to grow by 2% in 2022, the report stated.
As per the report's findings, Bangladesh's share of remittance earnings to the gross domestic product (GDP) reached 6.2% in 2021.
According to Bangladesh Bank data, remittance surge has been observed throughout fiscal year 2020-21 (July 2020 to June 2021).
In that fiscal, remittances sent by expatriates exceeded all previous records by $24.78 billion, which was 36.10% more than FY20.
However, since the beginning of FY22, the remittance flow has been declining.
Less than $2 billion in remittances have been accumulated in all months, except April.
According to Bangladesh Bank (BB) data, remittance earnings in the July-April period of FY22 stood at $17.3 billion.
Meanwhile, in 2022, remittance flows to low and middle-income countries (LMICs) are expected to increase by 4.2% and reach $630 billion.
An 8.6% growth was registered in 2021 with remittance flows reaching $605 billion.
According to the World Bank report, in top recipient countries for remittances in 2021, India retained its first position with $89 billion followed by Mexico, $54 billion, and China, $53 billion. Philippines was fourth and Egypt stood fifth.
Among economies where remittance inflows stand at very high shares of GDP were Lebanon (54%), Tonga (44%), Tajikistan (34%), Kyrgyz Republic (33%), and Samoa (32%).
Remittances to South Asia grew 6.9% to $157 billion in 2021.
The report said that although large numbers of South Asian migrants returned to their home countries as the pandemic broke out in early 2020, the availability of vaccines and opening of Gulf Cooperation Council economies enabled a gradual return to host countries in 2021, supporting larger remittance flows.
Better economic performance in the United States was also a major contributor to the growth in 2021.
But in 2022, growth in remittance inflows is expected to slow to 4.4%.
South Asia has the lowest average remittance cost of any world region at 4.3%, though this is still higher than the SDG target of 3%.
On the other hand, Sub-Saharan Africa ranked among most expensive for sending remittance, with 7.8%.
The report also said that remittances to East Asia and the Pacific fell by 3.3%, although excluding China, remittances grew 2.5%.
Excluding China, remittance flows have been the largest source of external finance for LMICs since 2015.
The report disclosed that during 2021, remittance inflows saw strong gains in Latin America and the Caribbean (25.3%), Sub-Saharan Africa (14.1%), Europe and Central Asia (7.8%), the Middle East and North Africa (7.6%).