Page 10 - Policy Economic Report - December 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

• The recovery of the job markets in the high-income countries of the Organization for Economic
Co-operation and Development (OECD), following the onset of the COVID-19 pandemic, has been
the key driver of remittances. This is especially true for the United States where the employment
of foreign-born workers has recovered steadily and is 11 percent higher than the pre-pandemic
level seen in February 2020.

• By region, remittance flows to South Asia are expected to register the highest increase in 2024, at
11.8 percent, driven mainly by continued strong flows to India, Pakistan, and Bangladesh.
Remittance to the Middle East and Africa is estimated to have increased 5.4 percent, primarily
due to rebounded flows to Egypt, compared with a 14.6 percent decline in 2023.

• In other regions, remittance growth to Latin America and the Caribbean is projected to slow to
5.5 percent in 2024, from 7.5 percent a year ago. Remittances to Mexico is expected to reach
about $68 billion in 2024, an increase of 3 percent. Mexico receives the most remittances in the
region by far and is the world’s second-largest recipient of remittances. Guatemala is the second
largest recipient of remittances in the LAC region.

3. World Bank announces record $100bn support for world’s poorest countries

The World Bank has announced that it has raised $24 bn to provide loans and grants for some of the
world’s poorest nations, which it can leverage to generate a record $100 bn in total spending power.

Donor countries committed $23.7 bn to replenish the bank’s concessional lending arm, known as the
International Development Association (IDA), marking a slight increase from the roughly $23.5 bn pledged
during the last fundraising round three years ago.

The bank can use this money to borrow on financial markets, allowing it to leverage the amount raised by
around four times, unlocking about $100bn in new loans and grants, up from $93bn in 2021. This funding
will be deployed to support the 78 countries. It will be utilized in resources to invest in health, education,
infrastructure, and climate resilience as well as to help stabilize economies and create jobs.

IDA has become the single largest source of concessional, or below-market, climate finance, and about
two-thirds of all IDA funding over the past decade has gone to support countries in Africa, according to
the World Bank, an international development organization owned by 187 countries.

IDA replenishment is a crucial part of the bank’s operations, and happens once every three years, with
much of the funding coming from the United States, Japan and several European countries including the
United Kingdom, Germany, and France.

4. Eradicating extreme poverty is decades out of reach- World Bank

According to World Bank, about 700 million people—or 8.5 percent of the global population—live in
extreme poverty on less than $2.15 a day. Around 3.5 billion people live on less than $6.85 a day, the
poverty line more relevant for middle-income countries, which are home to three-quarters of the world’s
population. Without drastic action, it could take decades to eradicate extreme poverty and more than a
century to eliminate poverty as it is defined for nearly half of the world.

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