Egypt received 15% less remittances annually in 2023, World Bank

The World Bank (WB) is forecasting a 15 percent year-on-year fall in remittances to Egypt from expats for 2023, dropping to $24.2 billion, according to its latest report, a significant change from its prediction of a 3.1 percent increase in its June 2023 report.

The WB explained that the growing gap between the official and unofficial exchange rates, which has led to a significant drop in remittances through official channels.

According to recent data from the Central Bank of Egypt, there was a reported 38 percent decline in remittance flows during the first half of 2023, amounting to $10 billion, recording lowest level recorded since the first half of 2017.

The WB’s report highlighted that the MENA region’s remittances are projected to fall by 5.3 percent to approximately $61 billion in 2023, following a 4.5 percent drop in 2022.

The bank explained that the new forecast was caused by the sharp decrease in flows to Egypt, the largest recipient in the region.

A shortage in foreign currency has expanded the gap between exchange rates, leading to the Egyptian government to implement new measure to strengthen the country’s FX reserves, the report noted.

The World Bank highlighted several initiatives by the Egyptian government to address the decline in remittances in its report, including announcing that that there is no plan to tax remittances back in March, offering land and housing for US dollars through the New Urban Communities Authority, plans by banks to launch savings products exempt from commissions for the diaspora, and efforts to promote the use of digital channels for remittances in the formal sector.