Global remittances could plunge $100 billion over coronavirus epidemic
Job losses and freezes due enforced since the coronavirus epidemic could cause a 20 percent drop in remittances from low and middle-income economies, the World Bank reported on Wednesday, causing an unprecedented fall in remittances from expatriate workers.
This would see remittances fall from from $554 billion to $445 billion, according to the World Bank.
"If we are expecting a fall of 20 percent it's going to be a huge shock, it’s going to cause a lot of hardship for countries in terms of macroeconomic management and balance of payments difficulties," Dilip Ratha, the World Bank's lead economist for migration and remittances told The Financial Times.
"But more important is the human story... The number of people who are going to be impacted - both for the migrants in host countries and families back home it’s going to be huge."
Many countries are reliant on remittances, making up as much as a third of the GDP of countries such as Somalia and South Sudan.
Countries such as India, Pakistan, Bangladesh and the Philippines also have millions of nationals working in the Middle East, whose send home pay is a vital stimulus for local economies.
Many families in these countries are also reliant on remittances to survive.
A global coronavirus epidemic has seen lockdowns and travel bans enforced on around half the world's population.
In Gulf states, such as the UAE, there have been reports of expatriates being deported as work, including in construction activity and retail, dries up.
Other workers have been laid off or had wage freezes due to the downturn in economic activity, while nationals have been largely cushioned by this impact.
Remittances to from workers in the Gulf to countries such as Jordan, Egypt, Yemen and Morocco are also a vital source of income.
An oil price crash has also added to the woes for Gulf businesses and governments.
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