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14
MARCH 2022
Money flows MY TAKE
Sending money home Despite the pandemic, migrants have continued to send money to their families. Global remittances to low- and middle-income countries grew 7.3% to $589bn in 2021, according to an estimate by the World Bank. It forecast growth of 2.6% in 2022. Migrant remittances are a “critical lifeline” in helping households cover essentials like food, healthcare and school fees. That is probably why the global recession only knocked 1.7% off the flow of funds in 2020. However, the cost of sending money home is high. Remitters shell out an average 6.4% to transfer $200, the World Bank said. That is more than twice the sustainable development goal of 3% by 2030. (Merchants in the rich world pay roughly 1%-2% for payment card transactions. Nearly all bank transfers on the EU’s Sepa system are free.) Ideally, as technology improves and volumes expand further, costs will come down. Perhaps that is a tangible target for the payments sector in Luxembourg, home to a notable number of (white collar) migrants.
LUXEMBOURG
NORTH AND CENTRAL AMERICA €0
Words AARON GRUNWALD
Money sent outside the EU On a per capita basis, Luxembourg residents remitted significantly more money outside the EU than any of the grand duchy’s neighbours in 2020. Each Luxembourg resident transferred an average of roughly €67 to locations outside the bloc, well ahead of people living in Belgium (€18), France (€3) and Germany (€0.05). This chart indicates total amounts sent. Source
Eurostat
€500m €400m
Net remittances
€300m €200m €100m €0m
2016
2017
2018
2019
Luxembourg
Germany
France
Belgium
2020
This map summarises the net balance of personal transfers (incoming minus outgoing transfers) between Luxembourg residents and non-EU27 households in 2020. “The majority of personal transfers consist of flows of money sent by migrants to their country of origin,” explains Eurostat. Luxembourg residents predominately send cash to non-EU European jurisdictions. Source
Eurostat
SOUTH AMERICA -€1,000,000 There are 3,666 citizens of South American countries living in Luxembourg, including 2,604 from Brazil, 283 from Colombia and 235 from Venezuela