Bangladesh has retained its position as the recipient of the seventh highest amount of money transferred by migrant workers among 10 top recipient nations in 2021.
This year, however, the country may continue to experience a meagre growth in remittance inflow of only 2 per cent this year.
The World Bank revealed the projection in a report titled "Migration and Development Brief" published on Tuesday.
The top six remittance recipient countries ahead of Bangladesh are India, Mexico (which moved up to replace China in second position), China, the Philippines, Egypt and Pakistan.
However, among the eight South Asian nations, Bangladesh laid claim to the 3rd highest remittance inflow after India and Pakistan.
Remittance inflow to Bangladesh increased by only 2.2 per cent in 2021 to $22 billion.
According to the report, the remittance growth was powered mainly by government incentives and support from migrants for their families back home.
In Bangladesh, except for a 24 per cent spike in March 2022 marking the start of the holy month of Ramadan, monthly remittance growth has been decreasing over the past eight months, mentioned the report.
The global lender, in the report, anticipated a 2 per cent remittance growth in Bangladesh in 2022.
South Asia's performance in remittance inflows in 2021 was spearheaded by India and Pakistan.
After a lull in 2020, remittance flows to India grew at 8 per cent in 2021 to $89 billion while in Pakistan it increased at an impressive 20 per cent in 2021 to $31 billion.
The report cited the main drivers for the rise in remittances from the US to South Asia in 2021.
Among them were better-than-expected economic recovery, generous fiscal stimulus measures, vaccine availability and record-high employment rates complemented with wage hikes.
While migration dynamics in the Middle East, which hosts a significantly larger share of South Asian migrants, were distinct from the US or Europe, it too supported a hike in remittance flows to South Asia in 2021, it said.
The global lender forecasted that as most South Asians in the US enjoy higher-income jobs, their potential to remit more is likely to be sustained in 2022 despite higher inflation.
Given the uncertain global economic conditions, especially the expected slowdown in growth in the US, remittances to India are expected to grow at 5 per cent in 2022.
The report predicted that remittances to Pakistan are likely to grow at 8 per cent to $34 billion in 2022.
The report termed the remittance outlook for South Asia in 2023 as highly uncertain.
"While high-frequency data for all countries except India show growth in remittances slowing in South Asia, it is unlikely that the strong growth in remittances in South Asia in 2020 and 2021 can be sustained through 2023," it said.
In India, remittances are projected to grow at 5 per cent in 2023 and in Pakistan and Bangladesh, by 8 per cent and 2 per cent, respectively, the report predicted.
Large numbers of South Asian migrants had returned to their home countries when the pandemic broke out in early 2020, reminded the report.
However, the availability of vaccines and opening of the Gulf Cooperation Council (GCC) economies enabled a gradual return of migrants in 2021, it said.
This facilitated larger remittance flows to South Asia to alleviate the economic burden inflicted by Covid-19's Delta variant and the paucity of vaccines, it added.
In 2022, higher oil prices and food price controls in the GCC will help to sustain migrants' potential to remit more money to ease the inflationary burden on their families in South Asia, with one exception, it stated.
"To reduce the costs of money transfers, they will resume the pre-pandemic practice of sending money through informal money transfer channels, thus gnawing into formal remittance flows to South Asia," said the report.
If the Russia-Ukraine war transforms into a multiyear phenomenon, and oil prices moderate closer to 2021 levels, food inflation in the GCC is inevitable and will dampen South Asian migrants' remitting potential in 2022–23, forecasted the World Bank.
According to the lender, South Asia has the lowest remittance costs of all regions in the world but is still about 50 per cent above the SDG target of 3 per cent.