BASSETERRE, St. Kitts – REMITTANCE flows have shrunk during the economic crisis, but new data emanating from the World Bank indicate that the world’s overall remittances will decrease less than originally projected in 2009.
This information was released in the November 18 economic outlook, which concentrated on the previous and revised projections for remittance flows. The data reveals that global remittances will fall to $317 billion in 2009, a 6.1% improvement from the predicted $338 billion projected in 2008.
The expected percentage drop is smaller than the World Bank’s July prediction of 7.3%.
While the trends in remittance flows are more favourable in this economic outlook, the World Bank warned that remittances may only see “a shallow recovery” in the next two years. The release attributed the cause of this slow recovery to a jobless post-crisis economy, which may be exacerbated by tighter immigration controls and unpredictable exchange rate movements.
“With this sluggish pace of recovery, remittance flows are unlikely to reach the 2008 level even by 2011,” the brief stated.
Although this remains a projection of the international institution, lead economist and manager of the Migration and Remittances Team in the Development Prospects Group Dilip Ratha noted that remittances trends will most likely be “more resilient” than the other forms of revenue. He added that it could soon become “even more important” as a source of development-financing in many developing nations.
“The most important new finding that we have come to, after monitoring the flows for the last 12 months or so during the crisis, is that even during a crisis in the migrant destination countries, remittances tend to be resilient. They don’t fall as much as private capital flows,” Ratha stated.
Remittance received in Asia is projected to significantly exceed initial projections, thanks to what the World Bank deems to be a “boom” in remittances.
However, it has not been a similar case for Latin America and the Caribbean. The region’s remittances are expected to drop more than expected, according to the release.
The release stated that remittance flows are expected to remain “almost flat” in 2010, with a modest increase of 1.4 percent, and to grow by 3.9 percent in 2011.
