World Bank: remittance flows to shrink 14% by 2021
As the COVID-19 pandemic and economic crisis continues to spread, The World Bank says projections are that global remittances will decline 14 per cent by 2021 compared to the pre-COVID-19 levels in 2019.
This is according to the latest estimates published in the World Bank’s Migration and Development Brief.
Remittance flows to low and middle-income countries are projected to fall by 7 percent, to $508 billion in 2020, followed by a further decline of 7.5 percent, to $470 billion in 2021.
According to the Bank, the foremost factors driving the decline in remittances include weak economic growth and employment levels in migrant-hosting countries, weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar.
Mamta Murthi, vice president for Human Development and chair of the Migration Steering Group of the World Bank said that "the impact of COVID-19 is pervasive when viewed through a migration lens as it affects migrants and their families who rely on remittances. The World Bank will continue working with partners and countries to keep the remittance lifeline flowing, and to help sustain human capital development.”
The declines in 2020 and 2021 will affect all regions, with the steepest drop expected in Europe and Central Asia (by 16 percent and 8 percent, respectively), followed by East Asia and the Pacific (11 percent and 4 percent), the Middle East and North Africa (8 percent and 8 percent), Sub-Saharan Africa (9 percent and 6 percent), South Asia (4 percent and 11 percent), and Latin America and the Caribbean (0.2 percent and 8 percent).
“Migrants are suffering greater health risks and unemployment during this crisis,” said Dilip Ratha, lead author of the Brief and head of KNOMAD. “The underlying fundamentals driving remittances are weak and this is not the time to take our eyes off the downside risks to the remittance lifelines.”
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