Egypt to witness 2.7% increase in remittance flows for 2022

Egypt is expected to gain about 2.7% in remittance flows for 2022 to reach $32bn, according to the World Bank’s Remittances Brave Global Headwinds Special Focus: Climate Migration report.

The report said that this development may reflect a rebalancing of flows among host countries and regions.

“Among the Organisation for Economic Cooperation and Development’s (OECD) economies, erosion of real wages among the Egyptian migrant workforce is likely dampening the remittance of earnings. However, Egypt’s strong ties to the GCC and other Arab countries has probably more than offset the weaker performance of OECD hosts. Fully one-half of Egypt’s migrant labour force resides in the GCC and sends back the bulk of remittances inflows to the country. Crude oil price-related windfalls are accruing to MENA’s high-income exporters (reducing external and fiscal deficits and spurring economic activity) and serving to support Egypt’s inflows. These in turn are now of critical importance to the country in offsetting persistent shortfalls on external and fiscal accounts,” the report read.

The report highlighted that persistent adverse trends in the global environment and deeper financial difficulties in the Middle East and North Africa region are anticipated to slow the pace of remittance receipts to 2% in 2023.

A balance of slowing economic activity — and of the real earning power of the overseas workforce, especially in Europe — needs to be assessed against sharply increasing demand for finance in the region. Upside risks to the projections could emerge should the altruism on display during 2021 resurface. In a base case scenario, flows to Morocco are likely to be hardest hit, dropping from growth of 44% in 2021 to 4% in 2023, and Egypt is expected to see a moderate 2% gain.