Washington: As a result of the deadly coronavirus pandemic, which has resulted in a global recession, remittances to India are likely to drop by 23% from USD 83 billion last year to USD 64 billion this year, the World Bank has said.
“In India, remittances are projected to fall by about 23% in 2020, to USD 64 billion a striking contrast with the growth of 5.5% and receipts of USD 83 billion seen in 2019, the World Bank said in a report on the impact of COVID-19 on migration and remittances released on Wednesday.
Globally remittances are projected to decline sharply by about 20% this year due to the economic crisis induced by the COVID-19 pandemic and shutdown.
The projected fall, which would be the sharpest decline in recent history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country, the bank said.
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, said World Bank Group President David Malpass.
Also read: Fitch Ratings Sees India Growth Slipping to 0.8% in FY21
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, he added.
Remittance flows are expected to fall across all World Bank Group regions, most notably in Europe and Central Asia (27.5%), followed by Sub-Saharan Africa (23.1%), South Asia (22.1%), the Middle East and North Africa (19.6%), Latin America and the Caribbean (19.3%), and East Asia and the Pacific (13%).
In Pakistan, the projected decline is also about 23%, totalling about USD 17 billion, compared with a total of USD 22.5 billion last year, when remittances grew by 6.2%.
In Bangladesh, remittances are projected at USD 14 billion this year, a likely fall of about 22%.
Remittances to Nepal and Sri Lanka are expected to decline by 14% and 19%, respectively this year.