Muscat: Remittance outflows from the Middle East and North Africa (Mena) region are expected to edge ahead by 1.6 per cent for 2016 year despite cyclically low oil prices, according to Xpress Money.
The latest World Bank report states that remittance growth to emerging markets has slowed in 2016 but has continued to hold its own for the year even in the face of market uncertainty. Remittances to low and middle-income countries (LMICs) are projected to hit $442 billion in 2016 – an increase of 0.8 per cent over the previous year. Remittances to the Mena region are expected to edge ahead by 1.5 per cent in 2016.
India, China, the Philippines, Mexico and Pakistan lead the mid-2016 table of remittance recipients among LMICs. Nepal heads the table for countries most reliant on remittances to bolster GDP, followed by Liberia, Tajikistan, Kyrgyz Republic and Haiti.
“It is heartening to see that economic challenges have not entirely stopped the growth of remittances. The remittance sector is holding on even as other market economic indicators register quite mixed readings. This is good news, because remittances are a powerful force for income equality, and help raise income levels, quality of life, and economic activity in emerging markets. They make families and communities more prosperous, and help people pull themselves out of poverty,” said Sudhesh Giriyan, chief operating officer of Xpress Money.
According to Xpress Money, the remittance industry is possibly one of the few industries that posts year-on-year growth, despite global market conditions. In 2008, when the world faced an economic meltdown, the remittance industry remained resilient and since 2010, the remittance industry has posted a positive 3.8 per cent year-on-year growth.
The remittance industry is one of the few industries that has posted nominal growth despite gloomy economic data. For instance, container traffic – considered a proxy for trade growth – has flat lined in 2016, with 10 of the world’s top 30 ports reporting a decline in traffic.
Similarly, the World Trade Organisation (WTO) is estimating that global trade growth is at its lowest levels since the financial crisis in 2009.Global retail too is being hit, despite low oil prices reducing goods manufacture and transport cost.
“While collated remittance data for 2016 won’t be released for a while, we’ve seen that global remittances have managed to survive the storm. We are looking forward to seeing a remittance recovery in the latter half of the year, and expect it to gather pace in early 2017. We expect 2017 to be a good year for remittances to developing countries – which will boost quality of life and spur investment in infrastructure, education and healthcare,” Giriyan added.