Sri Lanka’s remittance flow projected to fall by 9% in 2020, WB predicts

November, 6, 2020

The remittance flow to Sri Lanka is projected to decline by 9% in 2020 due to the economic crisis induced by Covid-19 pandemic and shutdown, according to a World Bank report published recently.

"The coronavirus-related global slowdown and travel restrictions will also affect migratory movements, and this is likely to keep remittances subdued even in 2021," WB stated.

In the report titled " Phase II: COVID-19 Crisis through a Migration Lens", WB also warned that not only Sri Lanka, but all the countries around the world will be hit by the deceleration in remittances.

Remittances to South Asia are projected to suffer a protracted decline of around 4% in 2020 and 11% in 2021.

“The deceleration in remittances to the South Asian region is driven by the prolonged global economic slowdown due to the coronavirus outbreak,” WB said.

“Given that the pandemic is likely to persist through 2021, the earlier anticipated V-shaped recovery now seems implausible. This is likely to directly affect remittance outflows from the United States, the United Kingdom, and the GCC and EU countries to South Asia,” it added

Remittance flows to low and middle-income countries (LMICs) are projected to fall by 7%, to $508 billion in 2020, followed by a further decline of 7.5%, to $470 billion in 2021.

“The foremost factors driving the decline in remittances include weak economic growth and employment levels in migrant-hosting countries, weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar,” WB said.