Low oil prices, weak EU economy to slow remittance inflows further - World Bank

The World Bank is projecting that remittance inflows to developing countries such as those in the Caribbean will be even lower than originally projected this year.

In its latest Migration and Development Brief published October 22, the World Bank predicted just a two per cent growth in remittances to developing countries, 1.3 percentage points lower than last year.

The Washington-based institution says weak economies in Europe, especially Russia, are slowing the growth of remittances. It adds that currencies that have weakened against the US dollar, along with lower oil prices, are further restricting the ability of many migrants to send money back to family and friends.

The World Bank says remittances to developing countries are expected to reach US$435 billion in 2015. This is down from US$440 billion it had predicted, in April of this year. It noted in its 2015 brief that the figure represented an increase of 0.9 per cent over total remittances to developing countries in 2014.

The bank says its latest forecast is a significant slowing in the growth of remittances from the rise of 3.3 percent in 2014 and 7.1 per cent per year from the 2010-2013 period.

Remittance inflows to Jamaica, however, have continued to perform above the average inflows to developing countries. Bank of Jamaica data shows inflows for the first half of the year increased by 4.1 per cent, with the country receiving some US$985.7 million up to June.  

Remittances are the main source of foreign exchange for Jamaica, contributing some US$2 billion to the economy annually.