Remittances to developing countries to decline 7.3pc

WASHINGTON - The World Bank has said that remittances to developing countries are expected to be 304 billion dollars in 2009, down 7.3 per cent from an estimated 328 billion dollars in 2008. According to the WB, remittances are relatively resilient because the migrants living overseas have been relatively unaffected by the global financial crisis, though new migration flows have declined. However, sources of risk to the outlook include uncertainty about the depth and duration of the current crisis, unpredictable movements in exchange rates, and the possibility that immigration controls may be tightened further in major destination countries. There is a risk that rising unemployment will trigger further immigration restrictions in major destination countries. Such restrictions would curb remittances more than forecast, said Hans Timmer, director of the WBs Development Prospects Group. Remittances have slowed down since the last quarter of 2008. In line with a recent downward revision in the WBs forecast of global economic growth, the new update on the remittance flows highlights the impact of the present financial crisis and describes broad regional and country specific trends. The new forecasts show a 6.9pc decline in remittances for the Latin America and Caribbean region, mainly due to a slowdown in the U.S. construction sector. Sub-Saharan Africa is also likely to experience a 8.3pc slowdown in its remittance flows. However, flows to SAsia and East Asia have been strong; but remittances are expected to decline somewhat in 2009. India, China and Mexico retain their position as the top recipients of migrant remittances among developing countries. Smaller economies such as Tajikistan, Moldova, Tonga, Lesotho, and Guyana are the top recipients in terms of the share of remittances in the GDP.

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