CHART: Global remittance flow to low and middle-income countries reach $860 Billion in 2023

Remittances have continued to be the premier source of external finance for low- and middle-income countries (LMICs) during 2023, surpassing foreign direct investment and official development assistance. Excluding China, remittances have stood as the largest source of external financing for LMICs for many years, highlighting their crucial role in supporting these economies.

In 2023, remittance flows to LMICs increased by an estimated 3.8%, reaching $669 billion. Despite the growth, this represents a slowdown in growth compared to the sharp increases observed in 2021 and 2022, a 2023 Migration brief by KNOMAD shows.

In contrast, remittance flows to high-income countries (HMICs) have shown almost no change since 2021. Global remittance flows are estimated at $860 billion in 2023, a minimal increase of 3% from the previous year.

A key driver behind the surge in remittances has been the robust recovery of job markets in high-income countries. Post-pandemic, employment growth has been more rapid for immigrants, significantly boosting remittance flows.

Moreover, the considerable rise in new instruments and channels for money transfer has also helped facilitate the flow of remittances. Innovations in financial technology have made it easier and cheaper for migrants to send money back home, contributing to the sustained growth of remittances.

Among the top recipients of remittances in 2023, India led the way with an estimated $125 billion. Mexico followed with $67 billion, then China with $50 billion, the Philippines with $40 billion, and Egypt with $24 billion as seen in the Techloy chart below. These countries have consistently received substantial remittances, reflecting the large financial contributions from their migrant populations.