The remittances of Lebanese expatriates hold a unique and absolute significance as a continuous channel for inflowing hard currency, registering an exceptional increase in the annual amounts that approach one-third of the country’s gross domestic product, according to "Kuwait News." At the end of a turbulent year, the World Bank estimated the volume of remittances received by Lebanon to be around 6.4 billion dollars, showing little change from the figures of 2022. Local estimates indicate an additional influx of around 5 billion dollars in 2023, attributed to a remarkable tourism season continued partially into the year-end holidays.
Experts and research centers confirm that amidst the blockage of external investment flow channels, remittances constitute a lifeline for the livelihoods of hundreds of thousands of resident families, primarily Lebanese, as well as Syrian and Palestinian families who receive sustainable cash assistance from workers abroad. Similarly, these remittances have gained added and significant importance in correcting the indicators of the trade balance and the balance of payments, which are suffering from severe distortions due to ongoing monetary and financial crises and their repeated collapses for the fifth consecutive year. They also contribute significantly to re-establishing the fragile stability of the national currency, which has lost about 98 percent of its purchasing power against the US dollar compared to the previous official rate.
Numerically, Lebanon ranks third regionally in terms of remittance inflows, preceded only by Egypt, which received about 24.2 billion dollars, and Morocco, with remittances amounting to 12.1 billion dollars. However, according to the World Bank's annual observations, the average cost of remittances to Lebanon from high-income countries within the OECD remains very high, placing Lebanon among the five most expensive corridors for money transfer.
In terms of qualitative comparisons, according to World Bank tables, Lebanon occupies the first position in the region and the fourth place globally regarding the contribution of expatriate remittances to the gross domestic product, amounting to 27.5 percent in 2023, compared to 35.7 percent at the end of 2022. Internationally, Tajikistan held the first place, where remittances represented 48 percent of its GDP, followed by Tonga at 41 percent and Samoa at 32 percent.
Regionally, the World Bank has estimated that remittances to the Middle East and North Africa will decline by 5.3 percent in 2023 to 61 billion dollars, due to the significant drop in remittances to Egypt. This anticipated decline in remittances to the Middle East and North Africa is attributed to a decrease in outflows from Saudi Arabia and the United Arab Emirates, which will be slightly offset by an expected improvement in Moroccan countries.
Overall, the World Bank's periodic report titled "Migration and Development Brief No. 39," published by the Research Department of the Lebanese Finance Group, projected remittances globally to increase by 3 percent to reach 860 billion dollars this year, up from 836 billion dollars in 2022. Geographically, remittances to low- and middle-income countries rose by 3.8 percent in 2023 to 669 billion dollars, marking an increase of 7.7 percent during 2022. This growth in remittances to low- and middle-income countries is attributed to the continued strength of labor markets in OECD countries and GCC member states.
It is noted that remittances have become the primary source of financing for low- and middle-income countries, surpassing foreign direct investments by over 250 billion dollars. The increasing importance of expatriate remittances has prompted relevant authorities to strengthen efforts to improve the timely and coherent information on remittances.
In Europe and Central Asia, the World Bank indicated that it expects a decrease in remittances by 1.4 percent during 2023, dropping to 78 billion dollars, which can be explained by the decline in cash transfers from Russia to neighboring countries due to the deterioration of the Russian ruble’s value against the US dollar.
As for the Latin America and Caribbean region, the report revealed an anticipated growth in remittances by 8 percent in 2023 to reach 156 billion dollars, driven by the strength of the labor market in the United States.
The report also expects remittances to the South Asia region to grow by 7.2 percent during 2023, reaching 189 billion dollars, spurred by a significant increase in remittances to India, which is expected to exceed previous estimates by about 14 billion dollars to reach approximately 125 billion.
In the Southern Africa and Sub-Saharan Africa region, remittances are expected to increase modestly by 1.9 percent, reaching around 54 billion dollars, primarily due to significant growth in remittances to Rwanda (16.8 percent) and Ethiopia (16 percent), as well as Mozambique, which recorded a record increase of about 48.5 percent.
