Remittances to India topped $60 billion last year
A considerable number of Indians went out of their way to send money home to their families last year, a new report from the World Bank has discovered.
According to World Bank data, total remittance flows to India hit $64 billion last year. That represents 3 percent of India’s gross domestic product, which is the total value of goods and services produced in a year.
Prior to this most recent report, the World Bank had reported in November of last year that India received about $58 billion in 2011. However, due to the rupee weakening, new estimates pushed the value of remittances northward to just under $64 billion.
Another reason for the revision, according to the World Bank, had to do with more economic activity occurring in the Gulf Cooperation Council countries, which include Kuwait, Oman, Saudi Arabia, Jordan and Morocco. While many Indians send money to India from the United States, the agency says Indian migrants have been relocating to the gulf countries frequently in recent months due to heightened economic activity.
As for what explains the increased pace in which natives are sending money to their homeland, it may have something to do with rising interest rates, according to industry expert Avijit Nanda. Nanda told The Times of India that interest rates for non-resident Indian have increased 125 basis points since November of last year, prompting more people to send money.
“We estimate that the remittance flows into India have gone up 20 to 25 percent as compared to the same period last year,” added Nanda.
Consistently, India ranks among the leading countries for total remittances, along with the Philippines, Mexico and China, where remittances represent approximately 1 percent of the Asian nation’s GDP.
The World Bank report also projected that remittances to the developing world increased last year, rising in virtually all nations with the exception of the Middle East and North Africa. As for what to expect in the years ahead, the agency says remittance flows to developing countries should increase by as much as 7 to 8 percent, potentially reaching $467 billion overall by 2014.