Market News

(Bloomberg) -- Discover what’s driving the global economy and what it means for policy makers, businesses, investors and you with The New Economy Daily. Sign up here.

Global remittances showed surprising strength in 2020 despite dire projections, as heavy government stimulus spending put cash in immigrants’ pockets to send home.

In April last year, the World Bank projected a 20% fall in remittances, but ultimately they dropped just 1.6% -- or $8 billion -- to $540 billion, according to a report published by the bank Wednesday. By comparison, payments fell 4.8% in the 2009 global financial crisis, the report says.

“The resilience of remittance flows is remarkable. Remittances are helping to meet families’ increased need for livelihood support,” said Dilip Ratha, lead author of the report. “They can no longer be treated as small change.”

Latin America and the Caribbean received particularly strong flows thanks to enormous U.S. government spending that kept employment steady and saw checks sent to residents. The sharp 12.5% decline Sub-Saharan African remittances was mostly due to a 28% drop in money sent to Nigeria, which suffered from high U.S. dollar-exchange premiums in informal markets, the report says.

Remittances will climb 2.6% to $553 billion in 2021 and 2.2% to $565 billion in 2022, the report projects.