Remittances to India Likely to Drop by 23% in 2020: World Bank

This is due to the economic crisis induced by the coronavirus pandemic.

Remittances to India are likely to drop by 23 per cent due to the coronavirus pandemic, says World Bank. Representational Image.

(Photo: iStock)

Remittances to India are likely to drop by 23 percent 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.

Globally, remittances are projected to decline sharply by about 20 percent 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, 22 April.

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 World Bank said.

“In India, remittances are projected to fall by about 23 percent 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 percent), followed by Sub-Saharan Africa (23.1 percent), South Asia (22.1 percent), the Middle East and North Africa (19.6 percent), Latin America and the Caribbean (19.3 percent), and East Asia and the Pacific (13 percent).

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

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

Remittances to Nepal and Sri Lanka are expected to decline by 14 percent and 19 percent, 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.