Diaspora Dollars Dwindle: Indian Remittance Growth Slips to 12-Year Low – India Real Time – WSJ

India’s global army of expatriates–which does everything from writing software in Silicon Valley to building skyscrapers in in Qatar–is the world’s most generous when it comes to number of dollars sent home, but this year they have become a bit stingy.

Recently released World Bank estimates predict the Desi diaspora will send home $65.45 billion this year. While that is just above remittances into China ($65.17 billion) and tens of billions beyond any other country, it is a 5% decline from last year.

The last time India saw a bigger slide in remittances was back in 2004 when remittances fell 11%.

Globally, remittances are expected to edge up about 1% this year, the World Bank predicted, so why is India underperforming?

The main problem is that many of the Gulf Cooperation Council countries have been struggling with the decline in oil prices. That has meant they are hiring fewer Indians, providing fewer perks to their international employees and in some countries even restricting the number of foreigners that can be hired.

“This year the South Asia region would see a decline of 2.3% in remittances to the region due mainly to the impact of declining oil prices and labor market nationalization policies on remittances from GCC countries,” the report said. “Moving forward remittance growth in the region is expected to remain subdued.”

Some parts of the southern state of Kerala and other regions in India that depend on remittances are already starting to feel the pain from the decline in oil riches.

The World Bank expects remittance growth to return, expanding 2.2% in South Asia next year and 2.3% the year after that. Globally remittance growth will likely be stuck below 4% for years, the bank said.

“Remittances continue to be an important component of the global economy, surpassing international aid. However this ‘new normal’ of weak growth in remittances could present challenges for millions of families that rely heavily on these flows. This, in turn, can seriously impact the economies of many countries around the world bringing on a new set of challenges to economic growth,” said Augusto Lopez-Claros, Director of the World Bank’s Global Indicators Group.

Source: Diaspora Dollars Dwindle: Indian Remittance Growth Slips to 12-Year Low – India Real Time – WSJ

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One Comment to “Diaspora Dollars Dwindle: Indian Remittance Growth Slips to 12-Year Low – India Real Time – WSJ”

  1. Diaspora Dollars Dwindle: Indian Remittance Growth Slips to 12-Year Low – India Real Time – WSJ

    The above news is informative and interesting.

    Before I read this news, I must admit that I did not know that remittances are an important component of the “global economy” and a slide in remittances can seriously impact the economies of many countries around the world. I never thought its importance to this extent.

    However, the reasons for the slide in remittances into India are given in the news piece.

    Like

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