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South Asian expats continue with remittances despite Covid pandemic: World Bank

Remittance inflow remains strong

Inflow of remittances into South Asia remained strong despite the Covid 19 pandemic. According to the World Bank, remittances into this region, increased by 5.2 per cent in 2020. “This was somewhat surprising because household surveys globally showed remittances falling, especially in the second quarter of 2020,” a World Bank blog noted. One of the primary reasons for the increase could be the larger use of formal channels compared to the pre-Covid phase.

“Before Covid-related travel restrictions, a significant share of remittances may have arrived through trips home by migrants or their trusted friends with cash in hand, gifts, etc. This was no longer an option during the pandemic,” it pointed out.

Also read: Covid 19 impact: FDI inflow into Bangladesh drops

Besides, tax incentives offered by several countries have also pushed remittances. In fact, remittance inflow has been strong in Pakistan, Bangladesh and Nepal.

However, a portion of the overall remittance could be due to repatriated savings of emigrants who may be returning home either due to loss of employment or for better opportunities.

Earlier, the World Bank in a report said that the decline in recorded remittance flows in 2020 was smaller than the one during the 2009 global financial crisis.

“As Covid-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank. “Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants.”