Money

Mapped: The Ins and Outs of Remittance Flows

Published

3 years ago

February 12, 2020

Iman Ghosh

Global remittance flows

Mapped: The Ins and Outs of Remittance Flows

The global immigrant population is growing at a robust pace, and their aggregate force is one to be reckoned with. In 2019, migrants collectively sent $550.5 billion in money back to their home countries—money transfer flows that are also known as remittances.

Remittances serve as an economic lifeline around the world, particularly for low- and middle-income countries (LMICs). Today’s visualization relies on the latest data from the World Bank to create a snapshot of these global remittance flows.

Where do most of these remittances come from, and which countries are the biggest recipients?

Remittances: An Origin Story

Remittances are a type of capital flow, with significant impacts on the places they wind up. These money transfers have surpassed official aid being sent to LMICs for decades, and in this day and age, are rivaling even Foreign Direct Investment (FDI) flows.

Remittance flows mainly help improve basic living standards such as housing, healthcare, and education, with leftover funds going towards other parts of the economy. They can also be a means for increasing the social mobility of family and friends back home.

Altogether, 50% of remittances are sent in either U.S. dollars, or the closely-linked currencies of Gulf Cooperation Council (GCC) countries, such as the Saudi riyal. It’s not surprising then, that the U.S. is the biggest origin country of remittances, contributing $68.5 billion in 2018—more than double that of the next-highest country, Saudi Arabia, at $33.6 billion.

Remittance Flows As A Safety Net

The impact of remittances on LMICs can vary depending on what you measure. In absolute terms, the top 10 LMIC recipients received $350 billion, or nearly 64% of total remittances in 2019.

Top Remittance Recipients in 2019 (USD)

Rank	Country	Remittance Inflows	% of Nominal GDP
#1	🇮🇳 India	$82.2B	2.8%
#2	🇨🇳 China	$70.3B	0.5%
#3	🇲🇽 Mexico	$38.7B	3.1%
#4	🇵🇭 Philippines	$35.1B	9.8%
#5	🇪🇬 Egypt	$26.4B	8.8%
#6	🇳🇬 Nigeria	$25.4B	5.7%
#7	🇵🇰 Pakistan	$21.9B	7.9%
#8	🇧🇩 Bangladesh	$17.5B	5.5%
#9	🇻🇳 Vietnam	$16.7B	6.4%
#10	🇺🇦 Ukraine	$15.9B	11.8%

India tops the chart as the largest remittances beneficiary, followed by China and Mexico. Interestingly, these three countries are also the main destinations of remittance flows from the U.S., but in the reverse order. Mexico and the U.S. have one of the most interconnected remittance corridors in the world.

However, the chart above makes it clear that simply counting the dollars is only one part of the picture. Despite these multi-billion dollar numbers, remittances are equal to only a fraction of these economies.

By looking at remittances as a percentage of nominal GDP, it’s clear that they can have an outsize impact on nations, even if the overall value of flows are much lower in comparison.

Top Remittance Recipients in 2019 (% of GDP)

Rank	Country	Remittance Inflows	% of Nominal GDP
#1	🇹🇴 Tonga	$0.19B	38.5%
#2	🇭🇹 Haiti	$3.3B	34.3%
#3	🇳🇵 Nepal	$8.6B	29.9%
#4	🇹🇯 Tajikistan	$2.3B	29.7%
#5	🇰🇬 Kyrgyz Republic	$2.4B	29.6%
#6	🇭🇳 Honduras	$5.3B	21.4%
#7	🇸🇻 El Salvador	$5.6B	20.8%
#8	🇰🇲 Comoros	$0.14B	19.3%
#9	🇼🇸 Samoa	$0.17B	18.4%
#10	🇵🇸 West Bank and Gaza	$2.6B	17.6%

It’s clear that the cash influxes provided by remittances are crucial to many smaller countries. Take the Polynesian archipelago of Tonga, for example: even though it only saw $190 million in remittances from abroad, that amount accounts for nearly 40% of the country’s nominal GDP.

Will The Remittance Tides Turn?

The World Bank projects remittance flows to increase to nearly $600 billion by 2021. But are such projections of future remittance flows reliable? The researchers offer two reasons why remittances may ebb and flow.

On one hand, anti-immigration sentiment across major economies could complicate this growth, as evidenced by Brexit. The good news? That doesn’t stop immigration itself from taking place. Instead, where these migrants and their money end up, are constantly in flux.

This means that as immigration steadily grows, so will remittance flows. What’s more, fintech innovations have the potential to bolster this progress, by making money transfers cheaper and easier to access.

Tackling [high transaction costs] is crucial not only for economic and social development, but also for improving financial inclusion.

—UN ESCAP, Oct 2019

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Economy

Charted: Public Trust in the Federal Reserve

Public trust in the Federal Reserve chair has hit its lowest point in 20 years. Get the details in this infographic.

Published

6 days ago

May 23, 2023

Marcus Lu

The Briefing

Gallup conducts an annual poll to gauge the U.S. public’s trust in the Federal Reserve
After rising during the COVID-19 pandemic, public trust has fallen to a 20-year low

Charted: Public Trust in the Federal Reserve

Each year, Gallup conducts a survey of American adults on various economic topics, including the country’s central bank, the Federal Reserve.

More specifically, respondents are asked how much confidence they have in the current Fed chairman to do or recommend the right thing for the U.S. economy. We’ve visualized these results from 2001 to 2023 to see how confidence levels have changed over time.

Methodology and Results

The data used in this infographic is also listed in the table below. Percentages reflect the share of respondents that have either a “great deal” or “fair amount” of confidence.

Year	Fed chair	% Great deal or Fair amount
2023	Jerome Powell	36%
2022	Jerome Powell	43%
2021	Jerome Powell	55%
2020	Jerome Powell	58%
2019	Jerome Powell	50%
2018	Jerome Powell	45%
2017	Janet Yellen	45%
2016	Janet Yellen	38%
2015	Janet Yellen	42%
2014	Janet Yellen	37%
2013	Ben Bernanke	42%
2012	Ben Bernanke	39%
2011	Ben Bernanke	41%
2010	Ben Bernanke	44%
2009	Ben Bernanke	49%
2008	Ben Bernanke	47%
2007	Ben Bernanke	50%
2006	Ben Bernanke	41%
2005	Alan Greenspan	56%
2004	Alan Greenspan	61%
2003	Alan Greenspan	65%
2002	Alan Greenspan	69%
2001	Alan Greenspan	74%

Data for 2023 collected April 3-25, with this statement put to respondents: “Please tell me how much confidence you have [in the Fed chair] to recommend the right thing for the economy.”

We can see that trust in the Federal Reserve has fluctuated significantly in recent years.

For example, under Alan Greenspan, trust was initially high due to the relative stability of the economy. The burst of the dotcom bubble—which some attribute to Greenspan’s easy credit policies—resulted in a sharp decline.

On the flip side, public confidence spiked during the COVID-19 pandemic. This was likely due to Jerome Powell’s decisive actions to provide support to the U.S. economy throughout the crisis.

Measures implemented by the Fed include bringing interest rates to near zero, quantitative easing (buying government bonds with newly-printed money), and emergency lending programs to businesses.

Confidence Now on the Decline

After peaking at 58%, those with a “great deal” or “fair amount” of trust in the Fed chair have tumbled to 36%, the lowest number in 20 years.

This is likely due to Powell’s hard stance on fighting post-pandemic inflation, which has involved raising interest rates at an incredible speed. While these rate hikes may be necessary, they also have many adverse effects:

Negative impact on the stock market
Increases the burden for those with variable-rate debts
Makes mortgages and home buying less affordable

Higher rates have also prompted many U.S. tech companies to shrink their workforces, and have been a factor in the regional banking crisis, including the collapse of Silicon Valley Bank.

Where does this data come from?

Source: Gallup (2023)

Data Notes: Results are based on telephone interviews conducted April 3-25, 2023, with a random sample of –1,013—adults, ages 18+, living in all 50 U.S. states and the District of Columbia. For results based on this sample of national adults, the margin of sampling error is ±4 percentage points at the 95% confidence level. See source for details.