September 13, 2021ShareShareTweetPin
Living in the Brexit era and with an ongoing immigration crisis that seems to not stop, many foreigners living in the UK and in other rich nations are sending money back to their home countries to sustain their families and friends.
With the UK receiving around 2.3 billion GBP in remittances in 2020 according to the World Bank data, the country is also one of the biggest senders, sending around 6.7 billion GBP last year only. These figures show a predominant trend, where countries with more resources are sending more money abroad than the quantity they receive.
Merchant Machine conducted a study to analyse which countries send and receive more money and the average prices for UK remittances, in order to predict how remittances will look in 2025.
The Biggest Senders
We analysed the outward remittance flows for the past 10 years, according to the data offered by the World Bank, to define the countries that are sending more remittances across the world:
|3||United Arab Emirates||32,636|
Showing 1 to 15 of 15 entries
The USA leads the way as the country whose immigrants send more money to their home lands, with an average outward remittance of $60.9 billion over the past 10 years. The country is followed by Saudi Arabia and the UAE, with an average outward remittance of $34.2 billion and $32.6 billion respectively.
The UK is also in the ranking, with an average outward remittance of around $10.2 billion, followed by Malaysia ($9.8 billion).
The Biggest Receivers
By analysing inward remittance flows for the past 10 years, we can see that these are the countries that are receiving more remittances:
As in the table, India is the country that received the highest amount of remittances on average over the past 10 years ($71.7 billion), followed by China and the Philippines.
France appears in both rankings, as one of the biggest senders and receivers, with an average outward remittance of $13.7 billion and an inward average remittance of $24.6 billion.
The UK ranks 34/194 with an average inward remittance flow of $4.5 billion, followed by Portugal ($4.3 billion).
The UK remittances flow
How much does it cost to send money from the UK to another country?
The research reveals the top 10 most expensive countries to send money to from the UK, based on remittance prices for each £120 and £300 that are being sent.
How would remittance flows look in 2025?
With so many political and economic changes over the past decade, what is the future of remittances going to look like? What is going to change for the biggest spenders and receivers?
Combining a linear trend and an exponential growth trend, we analysed how the rankings of both senders and receivers of remittances will change in the short term.
Top 20 biggest senders in 2015:
|OUTWARD REMITTANCE FLOWS
|2020 (US$ MILLION)||2025 (US$ MILLION)||% INCREASE OF OUTWARD
IN 4 YEARS
|United Arab Emirates||43,240||74,233.40||71.60%|
According to the table above, the UAE will have the highest percentage increase in remittances in 2025 at 71.6%, followed by Poland at 70.7% and China at 60.2%.
Outward remittances in the Russian Federation are going to see a drop in 2025, with a percentage decrease of -23%, declining from $16.8 to $12.9 billion.
The UK outward remittances in 2025 are going to increase by just 4.1%, the smallest increase amongst the countries in the table above.
Top 20 biggest receivers in 2025
|INWARD REMITTANCE FLOWS
|2020 (US$ MILLION)||2025 (US$ MILLION)||% INCREASE OF INWARD
REMITTANCES IN 4 YEARS
|Egypt, Arab Rep.||29,603||35,529.20||20.00%|
According to the study, Romania, Indonesia and Nepal are the countries that will experience the highest inward remittance flow increase in 2025, with a percentage increase of 68.8%, 37.9% and 34.5% respectively.
Belgium is the only country in the top 20 that will experience a possible decrease of -1.3% in its inward remittance forecast.
The UK ranks 51/195 among countries with the highest prediction, with a -2.8% decrease in inward remittance flow.
We looked at the inward and outward remittances rates for the different countries over the past 10 years and found which are the biggest receivers / biggest senders.
Then we used the last 10 available years of data to create estimates for 2025 assuming both a linear trend and an exponential growth trend – i.e. a trend following a straight line or following a curve – and then measured the difference between each estimate and the last year of available data. The trend model with the lowest difference was used as the final prediction for 2025.
Finally, to find average UK remittance prices, we analysed some of the UK’s biggest receivers and found the prices of remittances for the amounts of £120 and £300 -a common standard used by the World Bank- and then calculated the average.