India is the largest recipient of remittances globally

International migrants are sending increasing amounts of money back to their countries of origin, with a significant portion of these transfers directed to low- and middle-income countries (LMICs). According to World Bank estimates, India received the highest amount of remittances in 2023, totalling 120 billion US dollars. Mexico followed in second place with 66 billion US dollars, while the Philippines ranked third, receiving 39 billion US dollars in remittances. According to statistics provided by the United Nations, these three countries are among those with the largest migrant diasporas living abroad.

Highest remittances sent from migrants in the United States

Remittances are primarily sent from developed countries. According to World Bank estimates, migrants living in the United States sent the largest amount of money in 2023, totalling 93 billion US dollars. Saudi Arabia ranked second with 38 billion US dollars, followed by Switzerland with 37 billion US dollars, and Germany with 23 billion US dollars.

Transaction costs fall short of sustainability target

In the second quarter of 2024, the cost of sending an amount of $200 from Germany amounted to 5.8% of the total remittance, according to the World Bank. Although sending remittances from Germany is cheaper than the average cost from other G20 countries, it still falls short of the Sustainable Development Goal (SDG) target of reducing remittance costs to 3 % by 2030 This target is part of SDG 10, which aims to "reduce inequalities within and among countries".

Remittances play a significant role in improving household income in the recipient's country of origin. They can also have a positive impact on the broader economy of the migrant's home country. However, remittances can also have negative effects, such as a reduction in the local workforce, as more people leave to seek opportunities abroad, and the creation of a culture of financial dependency.

Methodology

Data on remittances are derived from the International Monetary Fund's (IMF) balance of payments statistics. The IMF defines remittances as the sum of two components:

• "Personal transfers", which are classified in the balance of payments in the group "secondary income";
• "Compensation of employees“, which includes wages, salaries, and other forms of income earned by cross-border or seasonal workers. This is recorded under "primary income" in the balance of payments. Wages and salaries of employees working for international organizations or foreign companies are also included in this category. As a result, these wage and salary payments are counted as remittances in the balance of payments, even if individuals are employed in their home country but work for international organizations or foreign companies.

Estimating the total amount of remittances accurately is challenging, as the figures can vary significantly between sending and receiving countries. According to World Bank estimates, sending countries remitted 518 billion US dollars in 2023. However, recipient countries reported receiving 822 billion US dollars in remittances, a figure that far exceeds the amount reported by sending countries. This significant discrepancy highlights the methodological challenges involved in producing accurate global remittance estimates.

According to the World Bank, this discrepancy arises from differences in how remittances are estimated across countries. Some countries primarily rely on data provided by banks or money transfer services to estimate remittances transferred through formal channels, while others conduct household surveys to capture remittances sent through informal channels, in addition to data from the formal sector. The actual amount of remittances may also be overestimated due to the misclassification of other types of international transfers as remittances. Furthermore, some countries do not provide official remittance data, which contributes to the discrepancy. For instance, countries like the United Arab Emirates and Singapore, despite being major remittance senders, do not report their data. As a result, 130 countries officially recorded remittance outflows, while 190 countries reported remittance inflows.

Data source

Data on remittances come from the World Bank. Last update: December 17, 2024.

This data is available from the World Bank and is categorized by sending and receiving countries. Another World Bank initiative, the Remittance Prices Worldwide project, regularly publishes reports on the current costs of sending remittances globally.