Inward remittance to South Asia rose by about 5.2 per cent to $147 billion in 2020, driven by a surge in flows to Bangladesh and Pakistan, according to the latest Migration and Development Brief of the World Bank Group.
Despite Covid-19, remittance flows remained resilient in 2020, registering a smaller decline than previously projected, it said.
Officially recorded remittance flows to low- and middle-income countries reached $540 billion in 2020, just 1.6 per cent below the 2019 total of $548 billion.
The main drivers for the steady flow included fiscal stimulus that resulted in better-than-expected economic conditions in host countries, a shift in flows from cash to digital and from informal to formal channels, and cyclical movements in oil prices and currency exchange rates, it read.
"As Covid-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable," said Michal Rutkowski, global director of the social protection and jobs global practice at the World Bank.
"Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants."
"The resilience of remittance flows is remarkable. Remittances are helping to meet families' increased need for livelihood support," said Dilip Ratha, lead author of the report on migration and remittances and head of KNOMAD.
"They can no longer be treated as small change. The World Bank has been monitoring migration and remittance flows for nearly two decades, and we are working with governments and partners to produce timely data and make remittance flows even more productive."
In South Asia, remittances to India, the region's largest recipient country by far, fell by just 0.2 per cent in 2020.
The decline is mainly caused by a 17 per cent drop in remittances from the United Arab Emirates, which offset resilient flows from the United States and other host countries.
In Pakistan, remittances rose by about 17 per cent, with the biggest growth coming from Saudi Arabia followed by the European Union countries and the United Arab Emirates.
In Bangladesh, remittances also showed a brisk uptick in 2020 (18.4 per cent), and Sri Lanka witnessed remittance growth of 5.8 per cent.
In contrast, remittances to Nepal fell by about 2 per cent, reflecting a 17 per cent decline in the first quarter of 2020.
For 2021, it is projected that remittances to the region will slow slightly to 3.5 per cent due to a moderation of growth in high-income economies and a further expected drop in migration to the GCC countries.
The average cost of sending $200 to the region stood at 4.9 per cent in the fourth quarter of 2020, the lowest among all the regions.
Some of the lowest-cost corridors, originating in the GCC countries and Singapore, had costs below the SDG target of 3 per cent owing to high volumes, competitive markets, and deployment of technology
But costs are well over 10 per cent in the highest-cost corridors.