Remittances to India likely to see 23% drop: World Bank

Remittances to India are likely to drop by 23 per cent from USD 83 billion last year to USD 64 billion this year due to the coronavirus pandemic, which has resulted in a global recession, the World Bank has said. 

Illustration: Dominic Xavier/Rediff.com.

Globally remittances are projected to decline sharply by about 20 per cent this year due to the economic crisis induced by the pandemic and shutdowns, according to a World Bank report on the impact of the Covid-19 on migration and remittances released on Wednesday. 

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, it said. 

"In India, remittances are projected to fall by about 23 per cent in 2020, to USD 64 billion -- a striking contrast with the growth of 5.5 percent and receipts of USD 83 billion seen in 2019,” the report said. 

World Bank group president David Malpass 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," he said. 

Malpass noted that 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 said. 

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 per cent), Latin America and the Caribbean (19.3 per cent), and East Asia and the Pacific (13 per cent). 

In Pakistan, the projected decline is about 23 per cent, totalling about USD 17 billion, compared to a total of USD 22.5 billion last year, when remittances grew by 6.2 per cent.  

In Bangladesh, remittances are projected at USD 14 billion this year, a likely fall of about 22 per cent.

Remittances to Nepal and Sri Lanka are expected to decline by 14 per cent and 19 per cent, respectively, this year. 

The deadly coronavirus has so far infected over 2,638,020 people and claimed   more than 184,230 lives across the globe.