In a setback, Pakistani remittances to take a big hit in 2020 over coronavirus pandemic
ISLAMABAD - In a setback, Pakistani remittances to take a big hit in 2020 over coronavirus pandemic.
The World Bank (WB) has projected a 23% decline in remittances for Pakistan, totaling about $17 billion in 2020 compared with a total of $22.5 billion in 2019 due to the economic crisis induced by the COVID-19 pandemic and shutdown as well as decline in oil prices.
WB, in its latest report, “Migration and Development Brief: COVID-19 Crisis through a Migration Lens” stated that global remittances are projected to decline sharply by about 20 percent while South Asia is projected to witness 22 percent decline in remittances in 2020.
The report stated that to encourage remittance service providers (RSPs) to facilitate remittance inflows, some governments (notably that of Pakistan) have announced tax incentives equivalent to the remittance fees waived. ------------------------------
According to the report in Pakistan, the projected decline is about 23 percent, totaling about $17 billion, compared with a total of $22.5 billion in 2019, when remittances grew by 6.2 percent.
In India, remittances are projected to fall by about 23 percent in 2020, to $64 billion – a striking contrast with the growth of 5.5 percent and receipts of $83 billion seen in 2019.
In Bangladesh, remittances are projected at $14 billion for 2020, a likely fall of about 22 percent. Remittances to Nepal and Sri Lanka are expected to decline by 14 percent and 19 percent, respectively, in 2020.
The coronavirus‐related global slowdown and travel restrictions will also affect migratory movements, and this is likely to keep remittances subdued even in 2021. The projected remittance growth of 5.8 percent in 2021 will keep total regional flows at about $115 billion.
Remittances to South Asia are projected to decline sharply by 22 percent to $109 billion in 2020. This is a significant and unprecedented deceleration compared with the growth of 6.1 percent seen in 2019.
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 economic slowdown is likely to directly affect remittance outflows from the United States, the United Kingdom, and EU countries to South Asia. Falling oil prices will affect remittance outflows from GCC countries and Malaysia.