Remittance inflow is the value of remittances entering a country during a period, usually a year. In official statistics it is recorded in the balance of payments and combines two items: personal transfers between households, and the compensation of residents who work abroad for short periods. Central banks compile the figures mainly from reports by banks and licensed money transfer businesses.
For many developing economies, inflows are among the largest sources of foreign currency, in some cases exceeding foreign direct investment or aid, and in a few small countries they equal a large share of gross domestic product. They support household spending, help finance trade deficits and tend to be steadier than investment flows. Recorded inflows understate the true total, since money carried by hand or sent through informal systems is not captured. The mirror measure for the sending economy is the remittance outflow.