Global remittances projected to fall 20% this year on coronavirus pandemic

The remittances decline 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 host countries.

Remittances to low and middle-income countries are projected to fall by 19.7 percent to $445 billion this year. In 2019, remittances to these countries reached a record $554 billion.

In 2021, the World Bank estimates that remittances to low and middle-income countries will recover and rise by 5.6 percent to $470 billion. The outlook for remittance remains as uncertain to the impact of COVID-19 on the outlook for global growth and on the measures to restrain the spread of the disease.

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, said World Bank Group President David Malpass.

In East Asia and the Pacific region, remittance flows are expected to decline by 13 percent in 2020.

Last year, remittance flows to the region grew by 2.6 percent to $147 billion, about 4.3 percentage points lower than the growth rate in 2018.

The slowdown is expected to be driven by declining inflows from the United States, the largest source of remittances to the region. Several remittance-dependent countries such as those in the Pacific Islands could see households at risk as remittance incomes decline over this period. A recovery of 7.5 percent growth for the region is anticipated in 2021, according to the report.

Vietnam is the third-largest remittance recipient in the region in 2019. Remittance to Vietnam reached $17 billion last year, accounting for 6.5% of GDP.