A Systematic Review of Foreign Remittances and Economic Growth in Developing Countries

Abstract

This systematic review investigates the relationship between foreign remittances and the economic growth of developing nations. This review also aimed to synthesise the empirical evidence of foreign remittances and economic growth indicators, such as gross domestic product, consumption, investments, savings, and other social factors. This study used the Preferred Reporting Items for Systematic Reviews and Meta-Analyses guidelines, and related studies were identified using the Social Science Research Network database. The inclusion criteria focused on empirically based peer-reviewed articles between 2012 and 2025 evaluating remittance flows and macroeconomic impacts. The reviews indicate that foreign remittances positively influence economic growth in developing economies. Economic growth is spurred by human resource development, expansion of the real estate sector, and rising consumption. However, the banking sector plays a vital role in channelling remittances toward productive uses. Foreign remittances have emerged as an important driver of economic growth and human development in developing countries with large labour markets. Future studies should shed light on the sustainability of these effects and the evolving role of artificial intelligence in the labour markets of developed countries providing employment.