The World Bank on Thursday said remittances to India would fall this year by nine per cent to $76 billion because of the ongoing coronavirus pandemic and global economic recession.
India followed by China, Mexico, the Philippines, and Egypt continue to be the top five countries in 2020 to get foreign remittances, the World Bank said in its latest outline.
As the Covid-19 pandemic and economic crisis continues, the amount of cash migrant workers send home is projected to decline 14 per cent by 2021 in comparison to the pre-Covid-19 levels in 2019, according to the newest estimates published in the World Bank’s Migration and Development Brief.
The have an effect on of Covid-19 is pervasive when viewed through the lens of migration as it affects migrants and their families who rely on remittances, said Mamta Murthi, Vice President for Human Development and Chair of the Migration Steering Group of the World Bank.
Remittance flows to low and middle-income countries (LMICs) are projected to fall by 7 per cent to $508 billion in 2020, followed by a further decline of 7.5 per cent to $470 billion in 2021.
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 United States dollar, the bank said.
The declines in 2020 and 2021 will impact all regions, with the steepest drop expected in Europe and Central Asia (by 16 per cent and 8 per cent, respectively), followed by East Asia and the Pacific (11 per cent and 4 per cent), the Middle East and North Africa ( both 8 per cent), Sub-Saharan Africa (9 per cent and 6 per cent), South Asia (4 per cent and 11 per cent), and Latin The usa and the Caribbean (0.2 per cent and 8 per cent), the outline said.
Remittances to South Asia are projected to decline by around four per cent in 2020 to $1 35 billion.
In Pakistan and Bangladesh, the have an effect on of the global economic slowdown has been reasonably countered by the diversion of remittances from casual to formal channels because of the difficulty of carrying money by hand under trip restrictions, the bank said.
Pakistan also introduced a tax incentive whereby withholding tax used to be exempted from July 1 2020, on cash withdrawals or on the issuance of banking instruments/transfers from a domestic bank account.
Bangladesh registered a large increase in remittance inflows in July after the floods that inundated a quarter of its landmass.
Remittance costs: At just under 5 per cent in the third quarter of 2020, South Asia used to be the least costly region to send $200 to but the costs are polite over 10 per cent in some corridors (from Japan, South Africa and Thailand, and from Pakistan to Afghanistan), it said.
Migrants are suffering greater health risks and unemployment all the way through this crisis, said Dilip Ratha, lead creator of the brief.
The underlying fundamentals driving remittances are weak and this isn’t the time to take our eyes off the downside risks to the remittance lifelines, he said.
This year, for the first time in recent history, the inventory of international migrants is likely to decline as new migration has slowed and return migration has increased.
Return migration has been reported in all parts of the world following the lifting of national lockdowns which left many migrant workers stranded in host countries.
Rising unemployment in the face of tighter visa restrictions on migrants and refugees is likely to result in a further increase in return migration, the bank said.
Commerce Standard has at all times strived tough to supply up-to-date information and remark on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and fixed feedback on how to give a boost to our offering have only made our get to the bottom of and commitment to these ideals stronger. Even all the way through these difficult times arising out of Covid-19, we continue to remain dedicated to keeping you informed and up to date with credible news, authoritative views and incisive remark on topical issues of relevance.
We, alternatively, have a request.
As we battle the economic have an effect on of the pandemic, we need your make stronger even more, in order that we will continue to give you more quality satisfied. Our subscription mannequin has seen an encouraging response from many of you, who have subscribed to our online satisfied. More subscription to our online satisfied can only help us achieve the goals of offering you even better and more applicable satisfied. We imagine in free, reasonable and credible journalism. Your make stronger through more subscriptions can help us practise the journalism to which we are dedicated.
Toughen quality journalism and subscribe to Commerce Standard.