In 2020, the sharpest in recent history, the decline of remittances worldwide. This is stated in the forecast, published April 22 on the website of the world Bank.
Experts predict that the volume of remittances will decrease by 20% due to the economic crisis caused by the pandemic coronavirus and stop the industry.
“The projected decline, which is the sharpest decline in recent history, largely due to falling wages and employment of labour migrants, who tend to be more vulnerable to loss of employment and wages during the economic crisis in the host country”, – said in the forecast.
According to the world Bank, remittances in countries with low and middle income will be reduced by 19.7% to $445 billion (remittances in 2019 amounted to a record $554 billion). This entails “the loss of vital financial support for many vulnerable households”.
“Remittances are a vital source of income for developing countries. The continuing economic downturn caused by the COVID-19, has had a serious impact on the ability of the [labor migrants] send money home,” said the President of the world Bank David Malpass.
According to him, in this regard, of particular importance is the reduction of lockdown in the advanced economies.
The world Bank predicts that remittances will start to recover in 2021 and will increase to $470 billion (5.6 percent), however, “prospects for remittances remain uncertain, as the influence of COVID-19 on global growth.”
Flash coronavirus infection COVID-19 began in late 2019 in Wuhan. In January – February 2020 first cases of infection with coronavirus have been confirmed outside of China, in late February – early March, the epidemic virus has spread to Europe and later the United States.
In connection with the quarantine imposed because of the epidemic, in many countries the closure of many factories, which caused massive economic crisis. According to IMF estimates, is the most serious crisis since the great depression.
The head of the European Central Bank Christine Lagarde said that the Eurozone recorded an “unprecedented economic decline”, whereas the prospects for its recovery remain uncertain.