Pandemic Induced Drop in Remittance Flows to South Asia

By Raghbendra JhaCANBERRA, Australia, Nov 6 2020 (IPS) Remittances are an essential part of economic activity in low and middle-income countries (LMIC), including those in South Asia. Because of the pandemic remittances to LMIC are expected to drop from $548 billion on 2019 to $508 billion in 2020 and $470 billion in 2021. The implied growth rates for 2020 and 2021 are -7.2% and -7.5%. For South Asia the drop will be from $140 billion in 2019 to $135 billion in 2020 and $ 120 billion in 2021 with implied growth rates of -3.6% and -10.9%. https://www.knomad.org/publication/migration-and-development-brief-33 Raghbendra JhaFor smaller South Asian countries, remittances are an even more significant part of their economic activity. For instance, remittances account for nearly 28% of Nepal’s GDP and 8 % of Pakistan’s. https://www.livemint.com/opinion/online-views/a-remittances-crisis-facing-south-asia-11596799996817.html Even for India, remittances have accounted for nearly 3% of GDP in recent times. Remittances thus serve the triple purpose of augmenting resources available to households to which these transfers are made, increasing funds for investment to the extent that remittances finance investment and support the current account balances of these countries. There are large deficits in the balance of trade of most South Asian countries. In the absence of remittances and other invisible flows, the deficits would continue to be very large, thus threatening a perpetuation...
Source: IPS Inter Press Service - Health - Category: International Medicine & Public Health Authors: Tags: Asia-Pacific Development & Aid Economy & Trade Headlines Health Humanitarian Emergencies Migration & Refugees TerraViva United Nations Source Type: news