Lockdown in wealthy nations jolts money flows to millions
Published On: Monday, June 1, 2020 | By: Team KnowMyStock
Lockdowns imposed by wealthy nations to slow the spread of the novel coronavirus, and the jolt those restrictions have delivered to their economies, are severing a vital lifeline for many often vulnerable people around the world: the billions of dollars in remittances sent home by relatives working abroad. Roughly one in nine of the global population receives remittances, or about 800 million people, according to the United Nations. Early data show severe drops have already taken place. The World Bank has said it expects global remittances to low- and middle-income nations to fall by $109 billion, or almost a fifth, in 2020 to $445 billion. The bank projects the pandemic will cut into the wages and employment of migrant workers, who tend to be the most vulnerable when there is an economic downturn in host countries.
The steep drop in remittances carries dire consequences for many countries around the world that are heavily dependent on such payments and whose economies are already reeling from a slump in demand triggered by the coronavirus crisis. The risks range from rising poverty and hunger to balance-of-payments emergencies for developing economies reliant on the cash.
The vulnerable spots include India, China and Mexico, the top recipients of remittances by value, according to the World Bank. The Philippines, the fourth-biggest recipient of remittances, has nearly one in 20 of its adult population working abroad.
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