Personal remittances, paid (current US$)
Remittance transactions have grown in importance over the past decade. In a number of developing economies, receipts of remittances have become an important and stable source of funds that exceeds receipts from exports of goods and services or from financial inflows on foreign direct investment. But the quality of statistical remittance data is not high. Remittances are a challenge to measure because of their nature. They are heterogeneous with numerous small transactions conducted by individuals through a wide variety of channels: formal channels, such as electronic wire, or through informal channels, such as cash or goods carried across borders. The large number of remittance transactions and the multitude of channels pose challenges to the compilation of comprehensive statistics. The small size of individual transactions means that they often go undetected by typical data source systems, although the aggregate level of transactions may be substantial.

Because of difficulties in obtaining data on informal remittance transactions, the remittance transactions undertaken through informal channels are sometimes not well covered in current balance of payments data. As a result, even though direct measurement of remittances - through transactions reporting or surveys - may be considered preferable if feasible, some countries instead combine different sources and estimation methods to achieve better coverage, by using direct measurements where practical and supplemented estimates where they are not. Model-based approaches are used in some countries as they are flexible. Compilers can design models to fill gaps in data sources or to provide global totals.

However, only reliable input data can lead to sound estimates, regardless of the sophistication of an estimation method or econometric model. Indirect data are converted to remittance estimates using a set of assumptions. These assumptions should be plausible, but it is often not possible to test or verify these assumptions and also the results in practice.
Personal remittances comprise personal transfers and compensation of employees. Personal transfers consist of all current transfers in cash or in kind made or received by resident households to or from nonresident households. Personal transfers thus include all current transfers between resident and nonresident individuals. Compensation of employees refers to the income of border, seasonal, and other short-term workers who are employed in an economy where they are not resident and of residents employed by nonresident entities. Data are the sum of two items defined in the sixth edition of the IMF's Balance of Payments Manual: personal transfers and compensation of employees. Data are in current U.S. dollars.