Stylized Facts About Remittance Flows

     Stylized Facts about Remittance Flows

• Global remittance flows are estimated to be $707 billion in 2019 as per the World Bank. About 78 percent of such remittance flows have been estimated to flow to low and middle income countries.
• Country wise, India is the largest receiver of remittance followed by China and Mexico. Out of the global flows of $707 billion, $82 billion dollar is estimated to flow to India in 2019. 
• Top 10 remittance receivers that include India, Pakistan and Bangladesh occupy 51 percent of the global remittance inflows.(see chart below).
• Top 20 remittance receivers that include Nepal along with 4 other countries from SAARC account for 67 percent of the global remittance inflows. 

• In terms of remittance inflows as percent of GDP,  Nepal is the third largest remittance receiver in the world. According to the World Bank, the estimated remittance inflow of Nepal will be 29.9 percent of GDP in 2019 (Chart 2). 

•  In SAARC region, remittance inflows to India, Pakistan and Bangladesh have increased sharply during the last decade(Chart 3).

Chart 3

•  In terms of remittance outflows,  US tops the lists followed by UAE and Saudi Arabia. About one third of remittance outflows comes from these countries. 
• Top 10 countries in terms of remittance outflows contribute about 59 percent of total remittance outflows. The following table shows the top 20 countries in terms of remittance outflows. 

Country	Remittance Outflows(million USD)	Percent of Total
United States	67,390	14.40
United Arab Emirates	44,367	9.48
Saudi Arabia	36,119	7.72
Switzerland	26,598	5.68
Germany	22,775	4.87
Russian Federation	20,610	4.40
China	16,253	3.47
Kuwait	13,760	2.94
France	13,745	2.94
Korea, Rep.	12,888	2.75
Qatar	12,759	2.73
Luxembourg	12,666	2.71
Netherlands	11,287	2.41
Oman	9,815	2.10
United Kingdom	9,802	2.09
Malaysia	9,394	2.01
Italy	9,262	1.98
India	6,959	1.49
Australia	6,772	1.45
Israel	5,911	1.26
Others	98,760	21.11
Total	467,894	100.00

  

• In terms of remittance outflows as percent of GDP, Luxembourg tops the list followed by Turk Island, Oman, Kuwait and Maldives.
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  Chart 4
•  In Nepal, remittance inflows has increased almost 18-fold during the last 19 years (from Rs. 47 billion in 2001 to Rs. 879 billion in 2019.)
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  Chart 5

• As percent of GDP,  remittance inflow increased from 10.7 percent in 2001 to 29.6 percent in 2016 and then decreased gradually to 25.4 percent in 2019. 
• Growth of remittance inflows has decelerated during the recent years.  Such flows increased by 30.3 percent on average during 2006-10 and by 22.1 percent during 2011-15 where as it decelerated to 9.3 percent during 2016-19. 
• Average growth of remittance inflows during the last 19 years is 18.6 percent.

Source wise Remittance Inflows of Nepal 

•  Nepal receives remittances mostly from Qatar, Saudi Arabia, India, UAE, UK, USA, Kuwait and Malaysia. According to the estimates of the World Bank, Nepal received 28 percent of the remittances from Qatar, 27 percent from Saudi Arabia and 15 percent from India in 2017(Chart 6).

  

  Chart 6

Remittance Outflows from Nepal 

• Almost all of the remittance outflows from Nepal goes to India. As per the estimates of the World Bank, out of the 3.2 billion USD remittance (About Rs. 365 billion) outflows from Nepal in 2017, about 94 percent went to India only (Chart 7). 
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Chart 7

•  Nepal is the eighth largest contributor to the remittance inflows of India from all over the world. Remittance outflows from Nepal to India contributes about 4.4 percent of the total remittance receipts of India.

Uses of Remittances 

• Although NLSS III carried out in 2010/11 shows that 79 percent of the remittances (that includes internal as well as international remittances) is spent on consumption, the share of international remittances spent on consumption is  lower than that.  
• The following table shows that more than 84 percent of the internal remittances is used for consumption while such share for international remittances vary from 55 percent for Qatar to 85 percent for India. 
• The share of remittance flows(internal as well as international) devoted to capital formation is 3.5 percent. In case of international remittances,  such share varies from 2 percent in case of India and 6.2 percent in case of Qatar(see table below).

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