Global remittances will see a sharp fall: WB
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In India, remittances for 2020 are likely to fall by 23% to $64 billion, it says
- Global remittances are projected to experience their sharpest decline in recent times — 20% — owing to migrants losing jobs and wages because of the COVID-19 pandemic.
- The pandemic and declining oil prices are likely to reduce remittances from the U.S., the U.K., and EU countries to South Asia, resulting in a projected fall of 22% in remittances to $109 billion. This is in stark contrast to 2019 when they grew by 6.1%.
- In India, remittances for 2020 are projected to fall by 23% to $64 billion. They grew 5.5% in the previous year to $83 billion.
- Remittances are crucial in low and middle income countries, financing household and family expenses — such as on higher education.
- As studies have shown that higher remittances improve nutritional outcomes by increasing investments in higher education, a fall in these remittances puts these outcomes at risk.
- This is especially true at a time when households were tackling food shortages and financing livelihood needs.
- Remittances are a vital source of income for developing countries. The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies.
- The sharpest decline was for Europe and Central Asia — where Russia is a strong source of income and the ruble had weakened against the U.S. dollar. Sub-Saharan Africa and South Asia were next in terms of projected declines.
- While remittance costs for some channels in South Asia are below 3% — the SDG (Sustainable Development Goal ) target and South Asia has the lowest remittance costs of any region — in some corridors in South Asia, they were above 10% due to a lack of competition, regulatory concerns and low volumes.
- Quick actions that make it easier to send and receive remittances can provide much-needed support to the lives of migrants and their families.
- These include treating remittance services as essential and making them more accessible to migrants. Global remittances will see a sharp fall: WB