Expats' global remittances to low, middle-income countries to drop further by $38 billion in 2021.
Money flows from expatriate hubs around the world to low and middle-income countries are forecast to drop by 7 percent to $508 billion this year, according to the latest figures from the World Bank.
In its Migration and Development Brief, the World Bank also projected that due to the economic slowdown and continued spread of the coronavirus pandemic, 2021 will also see remittances to fall further by 7.5 percent to $470 billion.
Among the major sources of remittances, the UAE and Saudi Arabia have already seen money flows fall during the first eight months of the year, recording single-digit declines in certain remittance corridors.
Remittances provide a lifeline to many countries around the world, offering a means to support the basic needs of expatriates’ dependent families. Just last year, low and middle-income countries received a record high of $548 billion in remittances in 2019, outstripping the foreign direct investment flows ($534 billion) and overseas development assistance (about $166 billion).
Decline
During the first eight months of the year, the amount of money sent by expatriates from the UAE to the Philippines alone dropped by 22.4 percent year-on-year.
Saudi Arabia also posted a 26.4 percent fall in remittances to the Asian country during the same period. A similar trend was also recorded in the United Kingdom, with money flows to the Philippines dropping by 11.8 percent from January to August this year.
“This likely reflects the absence of formal safety nets available to migrant workers in many host countries in the face of the pandemic and the large repatriation of overseas Filipino workers,” the report said.
The Philippines is one of the biggest recipients of remittances from the Middle East, as well as Europe. With more than 300,000 Filipino workers expected to return home by the end of the year, money flows to the Asian state are likely to decline by 5 percent this year, according to the World Bank.
Double-digit declines are also anticipated for Indonesia in 2020, driven by falling remittance inflows from Malaysia and Saudi Arabia.
“The impact of COVID-19 is pervasive when viewed through a migration lens 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.
All markets affected
The declines in remittances in 2020 and 2021 will affect all regions, according to the World Bank, with the steepest drop expected in Europe and Central Asia (by 16 percent and 8 percent, respectively), followed by East Asia and the Pacific (11 percent and 4 percent), the Middle East and North Africa (8 percent and 8 percent) .
South Asia will also see a decline of 4 percent this year and 11 percent in 2021, while the Latin America and Caribbean markets will see 0.2 percent and 8 percent declines.
Analysts had earlier forecast that job losses in the Gulf could lead to an exodus of expatriates, with more than 900,000 people in the UAE alone expected to lose their jobs in various industries due to the pandemic.
SOURCE: ZAWYA
