World Bank projects 19% decline in remittance for Sri Lanka

World Bank projects 19% decline in remittance for Sri Lanka

World Bank projects 19% decline in remittance for Sri Lanka

Written by Zahida Rizvi

24 Apr, 2020 | 7:40 pm

COLOMBO (News1st): The World Bank has projected that remittances received by Sri Lanka will drop by 19 percent in 2020 due to the global crisis induced by the COVID-19 pandemic and declining oil prices.

“The impending global recession creates less stability and job security for Sri Lankan-origin migrant workers, who under normal circumstances would remit regularly,” the World Bank said in a report.

The current situation which has impacted economies world over will result in global remittances to drop by 20 percent as a whole, the report read.

Meanwhile, a report from Institute of Policy studies (IPS) showed that Sri Lanka received USD 6.7 billion as remittances, which was capable of covering 84% of its trade deficit, in 2019.

Estimates from the IPS report outlines that one in every 11 households received international remittances, migrants normally remit once a month, and the average amount remitted is LKR 40,000 per month.

Remittances to South Asia are projected to decline by 22 percent to $109 billion in 2020, following the growth of 6.1 percent in 2019, according world bank report

The deceleration in remittances to the South Asian region in 2020 is driven by the global economic slowdown due to the coronavirus outbreak as well as oil price declines.

The rift between Saudi Arabia and Russia over the supply of oil, in the wake of declining demand for oil in the world market, has resulted in a huge fall in oil prices since March.

Remittances to low and middle-income countries (LMICs) are projected to fall by 19.7 percent to $445 billion, representing a loss of a crucial financing lifeline for many vulnerable households.

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).

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