Remittances from Egyptians abroad are set to rise 2.5% this year, climbing to USD 32.3 bn from USD 31.5 bn in 2021, according to the World Bank’s latest forecast (pdf). The Washington-based lender sees Egypt’s inflows benefiting from surging oil prices, which will increase transfers from Egyptian workers based in the Gulf.

This isn’t quite the rise the World Bank had expected earlier this year: In May, the lender had penciled in an 8% rise in remittances this year, but “dramatic changes” internationally as well as local developments have caused inflows to fall short of its forecast. Remittances have made only “weak advances” since 3Q 2021 on the back of surging inflation in advanced economies as well as the fiscal impact of food and fuel subsidies at home.

Egypt is still among the big five: Egypt is forecast to be the fifth-largest recipient of remittances this year. India is top with USD 100 bn while Mexico, China, and the Philippines round out the top four.

Inflows will rise by a slower pace in 2023, according to the Bank, which is forecasting 2% growth next year. It also sees remittances into MENA decelerating to 2% next year due to “persistent adverse trends in the global environment and deeper financial difficulties in the region,” according to the report.

Remittance inflows are of “critical importance” in helping Egypt offset its external and fiscal shortfalls, the Bank said. Remittances have become an increasingly important source of hard currency for Egypt due to the economic shocks caused by covid-19, the war in Ukraine, and tightening financial conditions. Inflows recorded a fresh high for the second year in a row in FY 2021-2022, climbing to USD 31.9 bn on rising oil prices boosting the transfers from the Gulf.