Remittances have grown to become an important source of foreign currency (FD) for Egypt, with FD flows slowed due to disruptions to tourist revenues by the pandemic and Russia/Ukraine conflict
Despite trade and supply issues, rising inflation and stressed budget deficits, Egyptian expats are expected to send even more support back to the country, with remittance flows to climb due to an “altruistic response” by Egyptians abroad, according to the World Bank’s (WB) latest report.
Remittances are forecast to climb 8% in 2022, according to WB. Remittances in MENA overall grew 7.6% in 2021 to record $61 billion, driven by robust gains into Morocco (40%) and Egypt (6.4%).
“Egypt is by far the largest recipient of remittances in the region (51% of total in 2021), garnering $32 billion, with stronger ties than those of the Maghreb to the GCC and other Arab countries... Remittance flows to the country are of critical importance in offsetting persistent shortfalls in external and fiscal accounts,” the report wrote.
In its report, “A War in a Pandemic… Implications of the Ukraine Crisis and COVID-19 on Global Governance of Migration and Remittance flows,” the World Bank said that Egypt came among the top five countries in terms of attracted remittances in 2021, with a total value of $32 billion, following India, Mexico (replacing China), China, and the Philippines.
Remittances have grown to become an important source of foreign currency (FD) for Egypt, with FD flows slowed due to disruptions to tourist revenues by the pandemic and Russia/Ukraine conflict.
It is also the largest source of external resource flows for developing MENA — among official development assistance (ODA), foreign direct investment (FDI), portfolio equity and debt flows —accounting for 61% of the total inflows in 2021, according to the report.
The report projected remittance flows to low- and middle-income countries to increase by 4.2% in 2022 to record $630 billion.
