World Bank has said that global remittances are dip by as much as 20% this owing to the economic uncertainty caused by the Covid-19 pandemic and shutdown. This would be the steepest fall in recent history.
The estimated decline in global remittances will be primarily because of a fall in the salaries and employment of migrant workers.
It is estimated that remittances to low and middle-income countries (LMICs) will plummet by 19.7% to $445bn. Last year, remittances to LMICs stood at $554bn.
Remittance flows will decline by 27.5% in Europe and Central Asia, 23.1% in Sub-Saharan Africa, and 22.1% in South Asia.
In the Middle East and North Africa remittance flow is expected to slide by 19.6%, 19.3% in Latin America and the Caribbean, 13% in East Asia and the Pacific, the report published by World Bank said.
World Bank Group president David Malpass said: “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.
“Remittances help families afford food, healthcare, and basic needs. As the World Bank Group implements fast, broad action to support countries, we are working to keep remittance channels open and safeguard the poorest communities’ access to these most basic needs.”
However, remittances to LMICs will recover in 2012 and jump by 5.6% to $470bn, the report noted.
World Bank global director of the Social Protection and Jobs Global Practice Michal Rutkowski said: “Effective social protection systems are crucial to safeguarding the poor and vulnerable during this crisis in both developing countries as well as advanced countries.
“In host countries, social protection interventions should also support migrant populations.”