Low, Middle Income Countries To Attract $508bn Remittances




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The World Bank has projected that remittances by migrant workers to low and middle income countries (LMICs) will drop to $508 2020.

 

a migration and development report released by the bank, it said the crisis induced by COVID- 19 could be long, deep, and pervasive when viewed through a migration lens.

 

It explained that based on the trajectory of activities large migrant hosting countries, especially the United States, European countries, and the Gulf Cooperation Council countries, remittance flows to low and middle income countries (LMICs) are projected to decline by 7.2 percent, to $508 in 2020, followed by a further decline of 7.5 percent, to $470 in 2021.

It said the adverse effects of the crisis in terms of loss of jobs and earnings, and exposure to and sickness , has been disproportionately high for migrants, especially for those in informal sectors and lower skilled jobs. Having jobs has shielded migrant workers suffering income losses during the crisis.

Another report suggests that migrants, especially those living in dormitories or camps, are vulnerable to the risk of infection the virus.

The projected declines in remittances are the steepest in recent history, and steeper the five per cent decline recorded during the 2009 recession. The foremost factors driving the decline in remittances are weak growth and employment situation in migrant hosting countries, a weak oil price, and exchange rates of the currencies of remittance source countries against the US dollar.

This outlook for remittances indicates a gradual but prolonged decline (continuing into 2021) our April outlook, which forecast a sharper decline in 2020 followed by a modest recovery in 2021. The outlook for remittances remains uncertain and will depend on the impact of on growth. This is linked, in turn, to uncertainties regarding the effectiveness of efforts to restrain the spread of the disease.

 

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