Remittances to India Projected to Increase by 2.5 Pct in 2015: World Bank

WASHINGTON:  Remittances to India are projected to increase by 2.5 pct this year, the World Bank has said in its latest report, even as weak economies in Europe, especially Russia, are slowing the growth of remittance flows.

In 2014, India is estimated to have received remittances worth $ 70.3 bn or nearly 4.5 lakh cr.

In its latest report, the World Bank said remittances to India, South Asia's largest economy and the world's largest remittance recipient, are projected to increase by 2.5 pct in 2015, below the regional average but well above the 0.6 pct increase in 2014.

"Stronger remittance growth in India reflects improving economic prospects in the United States and continued fiscally-supported economic resilience in the GCC (Gulf Cooperation Council)," the World Bank said.

According to the Reserve Bank of India, about 35 pct of remittances to India originate in North America, and another 35 pct in the GCC countries.

The Bank said the recent depreciation of the Indian rupee may have boosted investment-oriented remittances to India.

Nevertheless, the regional growth rate of remittances is projected to moderate to about four per cent over the next two years, in part because remittances to Nepal and Pakistan are expected to decelerate after the large inflows following the earthquake, while lower oil prices may reduce remittance inflows from the GCC countries eventually.

In its report, the Bank said remittances to developing countries are expected to reach $ 435 bn in 2015, registering a modest growth rate of two per cent from last year.

This represents a significant slowing in the growth of remittances from the rise of 3.3 pct in 2014 and of 7.1 pct per year from 2010 -13.

Global remittances, sent home from some 250 million migrants, are projected to grow by 1.3 pct to $ 588 bn.

Slowing remittances this year will affect most developing regions, in particular Europe and Central Asia where flows are expected to decline by 18.3 pct in 2015.

A weakening of the Ruble against the U.S. Dollar is the main cause of that decline, it said.

Global flows of remittances are expected to recover in 2016 to reach $ 610 bn, and then rising to $ 635 bn in 2017.

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