International

Global poor hit as Covid-19 causes drop in remittances

Migrants often make international payments to support their families back home. Now these important transfers have declined dramatically amid the global coronavirus outbreak.

Sunil N. is desperate. The polyglot tour guide from Sri Lanka used to show visitors from Germany and elsewhere around his island. But previous crises have hurt the tourist industry, and the coronavirus pandemic now means he has no source of income. “We are skipping meals,” he told DW by email.

Sunil says the government has imposed another curfew, because the virus is spreading again, which means “we don’t have money to buy groceries, we have become beggars.” With Sri Lanka’s tourist sector hit hard by the pandemic, Sunil and his family depend on money sent from friends abroad.

But that might be a problem, because according to World Bank spokesperson Alexandra Klopfer Hernandez, global remittances have dropped recently. “There was a sharp decrease in payments during April and May following the lockdown,” she said.

While a certain increase occurred in June and July, Hernandez remains pessimistic about the future: “We predict a further decline of remittances because of high global unemployment among migrants and the economic crisis.”

As early as spring, the World Bank was projecting that the pandemic would cause a 20% drop in remittances. In 2019, remittances worth $554 billion (€473 billion) were transferred by migrants to their families back home — $133 billion of which was sent from Europe.