Remittance to the Middle East and North Africa (MENA) countries is estimated to decline by 5.3% year-on-year (YoY) to $61 billion in 2023, mainly due to a sharp drop in flows to Egypt, according to the World Bank’s latest Migration and Development report.

Remittances to Egypt are expected to decline about 15% to $24.2 billion in 2023, it added.

In the first half of 2023, remittance flows fell by 38% to $10 billion compared to $16.3 billion a year earlier - the lowest level the country recorded since the first half of 2017, the report said, citing data from the Central Bank of Egypt.

Another reason for the decline is a significant gap between the official exchange rate and the parallel market, which may have resulted in a large share of remittances being unrecorded in the official statistics, the report added.

The current weakness is also partly tied to the slowdown in outward remittances from Saudi Arabia and the UAE, which is related to some correction from the pandemic-related distortions.

According to the World Bank, the prospects for remittances to the MENA region will be affected by the difficult situations facing the region’s oil-importing countries, such as Egypt, Jordan, Lebanon, Morocco, and Tunisia.

Uncertain regional prospects amid the conflict in the Middle East may lead to increases in their fiscal and current account deficits and could impair political stability, the report said.

Nevertheless, the World Bank forecasts a moderate gain of 2.1% in remittance flows in 2024 to $62 billion.     

(Editing by Brinda Darasha;