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World Bank predicts "sharpest decline" of remittances due to COVID-19

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World Bank predicts sharpest decline of remittances due to COVID-19
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Washington: Global remittances are projected to decline by about 20 per cent this year due to the COVID-19-induced economic crisis, the World Bank Group (WBG) said.

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 WBG said in a statement on Wednesday, reported Xinhua news agency.

Remittances to low and middle-income countries are projected to fall by 19.7 per cent to US $445 billion, representing a loss of a crucial financing lifeline for many vulnerable households, according to the statement.

"Remittances are a vital source of income for developing countries," said World Bank Group President David Malpass, noting that remittances help families afford food, healthcare, and basic needs.

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."

"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," said the president.

Remittance flows are expected to fall across all World Bank Group regions, most notably in Europe and Central Asia (27.5 per cent), followed by Sub-Saharan Africa (23.1 per cent), South Asia (22.1 per cent), the Middle East and North Africa (19.6 percent), Latin America and the Caribbean (19.3 per cent), and East Asia and the Pacific (13 per cent).

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