Money transfers from migrants overseas could rebound to prepandemic levels, upending a World Bank forecast of a further slowdown in remittances to developing countries in 2021, according to a new study.
Remittances, an important source of external financing for low and middleincome countries, have not slumped as much as initially feared during the coronavirus pandemic, even rebounding to some economies, including Mexico, El Salvador, Kenya, Pakistan, Bangladesh, the Philippines and Sri Lanka. Uncertainty around the outlook for remittances is high, noted the report by Oxford Economics commissioned by Western Union. But it added that as advanced economies recover and if demand for funds from developing economies remained high, then remittance performance in 2021 could even return to prepandemic levels.
Crises make people more determined to provide support to the people they care about. When times get hard in developing economies, remittancesenders become frontline workers of economic security, said Hikmet Ersek, President and CEO of Western Union, in a statement accompanying the report.
In the massive task of rebuilding developing nations in a postpandemic world, millions of these economic first responders will continue to step up.
The report added, however, that remittances could also decline further as more money may be sent by unofficial channels, as borders start to reopen, and if a fall in the stock of migrant workers seen in 2020 continues.
The World Bank in…