“A weakening of remittance flows can have a serious impact on the ability of families to get health care, education or proper nutrition,” says the World Bank’s Rita Ramalho.
To blame, says the bank: low oil prices and weak economic growth in energy-rich Gulf countries, Europe and Russia, which took a toll on flows to South Asia, Central Asia and sub-Saharan Africa. Bangladesh saw a drop of 11.1 percent, while flows to India fell 8.9 percent.
Overall, global remittances fell 1.2 percent to $575 billion in 2016, following a 1.7 percent drop in 2015. When transactions between high-income countries are excluded, money flows from foreign workers in rich nations to their poorer home countries saw an even sharper decline.
One bright spot: Latin America, which saw a 6.9 percent spike over 2015; senders took advantage of a strong U.S. labor market and beneficial exchange rate.
This post originally appeared in ImpactAlpha’s daily newsletter. Get The Brief.
Photo credit: humanosphere.org