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Remittances could be severely reduced by the pandemics
Risks may be high also for several Balkan countries
29 April, 17:49
(by Stefano Giantin)
(ANSA) - BELGRADE, APRIL 29 - The coronavirus pandemics
could have a significant impact also on economies and social
systems in the Balkans through the decline of remittances from
abroad, data recently released from the World Bank (WB)
suggests.
"Global remittances are projected to decline sharply by about 20 percent in 2020 due to the economic crisis induced by the COVID-19 pandemic and shutdown," the Bank said on April 22, releasing a "Migration and Development Brief" focused on the consequences of the COVID-19 crisis on migration and remittances. Moreover, "remittances to low and middle-income countries are projected to fall by 19.7 percent to $445 billion, representing a loss of a crucial financing lifeline for many vulnerable households," the World Bank noted.
The decline of remittances due to the pandemics could be the "the sharpest in recent history," the Bank warned.
According to forecasts from the WB, the flow of remittances is expected to fall in particular in Europe and Central Asia, a region where a drop of 27.5 percent is expected in 2020, followed by Sub-Saharan Africa (23.1 percent), South Asia (22.1 percent), the Middle East and North Africa (19.6 percent), Latin America and the Caribbean (19.3 percent), and East Asia and the Pacific (13 percent).
In Europe and Central Asia, remittances grew by about 6 percent to $65 billion in 2019, with Ukraine remaining the largest recipient (nearly $16 billion in 2019, around 11% of GDP), the Bank said. However, the scenario in 2020 could be it significantly different, after many workers lost their job or returned home. "Many Ukrainians working abroad, estimated at some 3-4 million, were having a difficult time finding employment as tightened border controls blocked many temporary and seasonal workers from moving throughout Europe" amid the COVID‐19 pandemic. "Some of them returned to Ukraine, though many were stranded abroad," the WB Migration and Development Brief reads. Many Romanian and Bulgarian citizens, and workers from the Balkans previously residing the European Union member countries also returned home amidst the pandemics, local media reported in the previous weeks.
The WB made no precise estimates on the possible drop of remittances in the Balkans. However, the consequences of the fall in remittances could be particularly negative also in certain parts of the Balkan region, taking into account the importance of remittances in the area. According to World Bank data, remittances contributed to 15.5% of the GDP in Kosovo in 2018, followed by Montenegro (10.7% of GDP), Bosnia and Herzegovina (10.5%), Albania (9.6%), Serbia (8.5%), Croatia (4.7%), Bulgaria (3.6%), Romania (2.9%) and North Macedonia (2.7%). In 2019, the inflow of remittances to Romania amounted to 7.2 billion dollars, according to new estimates of the World Bank. The inflow in Bulgaria was of 2.3 billions dollar, 2.1 in Bosnia and Herzegovina.
"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. "Remittances help families afford food, healthcare, and basic needs," Malpass added. (ANSA).
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"Global remittances are projected to decline sharply by about 20 percent in 2020 due to the economic crisis induced by the COVID-19 pandemic and shutdown," the Bank said on April 22, releasing a "Migration and Development Brief" focused on the consequences of the COVID-19 crisis on migration and remittances. Moreover, "remittances to low and middle-income countries are projected to fall by 19.7 percent to $445 billion, representing a loss of a crucial financing lifeline for many vulnerable households," the World Bank noted.
The decline of remittances due to the pandemics could be the "the sharpest in recent history," the Bank warned.
According to forecasts from the WB, the flow of remittances is expected to fall in particular in Europe and Central Asia, a region where a drop of 27.5 percent is expected in 2020, followed by Sub-Saharan Africa (23.1 percent), South Asia (22.1 percent), the Middle East and North Africa (19.6 percent), Latin America and the Caribbean (19.3 percent), and East Asia and the Pacific (13 percent).
In Europe and Central Asia, remittances grew by about 6 percent to $65 billion in 2019, with Ukraine remaining the largest recipient (nearly $16 billion in 2019, around 11% of GDP), the Bank said. However, the scenario in 2020 could be it significantly different, after many workers lost their job or returned home. "Many Ukrainians working abroad, estimated at some 3-4 million, were having a difficult time finding employment as tightened border controls blocked many temporary and seasonal workers from moving throughout Europe" amid the COVID‐19 pandemic. "Some of them returned to Ukraine, though many were stranded abroad," the WB Migration and Development Brief reads. Many Romanian and Bulgarian citizens, and workers from the Balkans previously residing the European Union member countries also returned home amidst the pandemics, local media reported in the previous weeks.
The WB made no precise estimates on the possible drop of remittances in the Balkans. However, the consequences of the fall in remittances could be particularly negative also in certain parts of the Balkan region, taking into account the importance of remittances in the area. According to World Bank data, remittances contributed to 15.5% of the GDP in Kosovo in 2018, followed by Montenegro (10.7% of GDP), Bosnia and Herzegovina (10.5%), Albania (9.6%), Serbia (8.5%), Croatia (4.7%), Bulgaria (3.6%), Romania (2.9%) and North Macedonia (2.7%). In 2019, the inflow of remittances to Romania amounted to 7.2 billion dollars, according to new estimates of the World Bank. The inflow in Bulgaria was of 2.3 billions dollar, 2.1 in Bosnia and Herzegovina.
"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. "Remittances help families afford food, healthcare, and basic needs," Malpass added. (ANSA).
