•The easing of inflation in the USit is to ease the burden on households.
• The United States accounts for 58% of remittances to Kenya, and WorldRemit maintains a positive outlook for market flows, Europe, the Middle East and Africa.
Remittances to Africa, in addition to Kenya, are expected to remain strong in the fourth quarter of the year, with Kenyans abroad keeping their families at home.
The expected decline in U. S. inflation is expected to be expected to occur. The U. S. economy, which was set at 8. 1% in August, from a 40-year high of 9. 1% in June, will ease the burden on households.
The United States accounts for 58% of remittances to Kenya, and global payment company WorldRemit maintains a positive outlook for key market inputs, Europe, the Middle East and other African countries.
Kenyans who live and work have had to cut costs in order to send cash home, a trend the company says will continue in the short to medium term.
A WorldRemit survey conducted in June showed that 49% of respondents said they ate less in restaurants, 46% stored in spending, while 28% limited social gatherings to save money.
About 25% of respondents said they opted for public transportation over the car to save, leading them to continue with their circle of family and friends at home.
“Migrants’ resilience and commitment to their loved ones at home have proven vital, especially at a time when family spending is emerging around the world,” Jorge Godinez Reyes, WorldRemit’s director for the Americas, said at the end of the findings.
Despite the delicate economic situation, remittances are proving resilient globally, the company notes, and migrants remain willing to change their lifestyle to keep sending cash home.
This most recent study shows that, even in times of financial instability, many immigrants make changes to keep remittances flowing to their families and enjoy them in their home countries.
However, the majority (52%) say they send cash to fewer people due to the complicated economic situation.
Despite this, the World Bank has forecast remittance flows to low- and middle-income countries.
In the past, it forecast a 4. 2% expansion this year to $630 billion (75. 8 trillion shillings).
That’s after a record recovery of 8. 6% in 2021.
Remittances to sub-Saharan Africa rose 14. 1 percent to $49 billion (5. 8 trillion shillings) in 2021, after an 8. 1 percent drop for the year.
Expansion of remittances supported by strong economic activity in Europe and the United States, the World Bank says.
Inflows to Nigeria, the region’s largest recipient country, rose 11. 2 percent, thanks in part to policies to channel inflows through the banking system.
Kenya is known among the countries that record strong inflows throughout Cape Verde and Gambia.
However, transaction prices are high, according to the World Bank, with an average global shipping charge of $200 to 6. 5%, more than double the sustainable progression target of 3%.
“Supporting remittance infrastructure and keeping remittances up to date includes efforts to reduce tariffs,” the World Bank said in its report.
According to the World Bank, a relief in moving fees of at least two percentage issues would translate into $12 billion (1. 4 trillion shillings) in annual savings for foreign immigrants from low- and middle-income countries.
“However, cross-border payment systems are very likely to become multipolar and less interoperable, which will delay progress in reducing remittance fees,” said Dilip Ratha, leader of the migration and remittances report and director of KNOMAD.
However, WorldRemit reduced the costs of moving abroad due to the Covid-19 pandemic, making sending cash to 450 of its largest brokers in Africa less expensive.
According to the company, the drop in prices has allowed consumers to send more to their circle of family and friends through the mobile application or website to African brokers, from which Kenya has been one of the great beneficiaries.
Education, health care and family desires are the main uses of remittances in Kenya, according to research conducted by the company.
The higher rate of education is expected to further increase the living rate of most families in Kenya.
According to the company, families paid more than 1. 75 times their monthly source of income in school supplies during the recent back-to-school era in August.
Families in Morocco, Cameroon, Ghana, Guatemala and Kenya are expected to spend more on education than the average monthly source of income.
The average living wage in the country is estimated at 21,504 Sh for Trading Economics.
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