World Bank Sees Remittance Flows To Drop By 7.3 Percent In 2009

July 14, 2009 5:32 p.m. EST

Washington, DC (AHN) - Remittance flows to developing countries are likely to come down to $304 billion in 2009 from $328 billion of the previous year, the World Bank said on Monday.

But the predicted decline in remittances by 7.3 percent this year is not as large as that of the drop for private flows to developing countries, according to the World Bank.

"Remittances are relatively resilient because, while new migration flows have declined, the number of migrants living overseas has been relatively unaffected by the crisis," the World Bank said in a press statement.

The World Bank, however, said that certain factors could affect that optimistic outlook. Those factors include uncertainty about the extent and duration of the current crisis, unpredictable movements in exchange rates, along with the potential for tighter immigration controls in major destination countries.

Drops in remittance flows to Latin America have been caused, in part, by the slowdown in the U.S. construction sector, the statement added.

World Bank officials are also predicting that there will be a 6.9 percent decline in remittances for the Latin America and Caribbean region and a likely decline in Sub-Saharan Africa remittance flows of up to 8.3 percent.

"However, flows to South Asia and East Asia have been strong; but remittances are expected to decline somewhat in 2009," the World Bank noted.

But the news isn't all bad, at least not for some countries.

Smaller economies such as Tajikistan, Moldova, Tonga, Lesotho, and Guyana are the top recipients in terms of the share of remittances in GDP. In those nations, the remittances accounted for more than a quarter of their gross domestic product (GDP).

And there is even better news for India, China and Mexico, however, as those nations retain their position as the top recipients of migrant remittances among developing countries.