Impact of COVID-19 on remittances (EMN Inform)
The outbreak of the COVID-19 pandemic and the substantial measures taken by EU and OECD countries to prevent the spread of the virus had substantial consequences on remittances and the companies providing remittances services.
This joint EMN - OECD Inform reports on the consequences of the pandemic on remittances and on the companies providing remittances services. Some key findings:
- Remittances and migration are closely linked. Remittances have been reaching record highs over the last years ($ 554 or € 503 billion remitted to low- and middle-income countries in 2019). EU and non-EU OECD countries represent together 55% of the global remittances sent.
- In pre-COVID-19 times, migrants send an average of 15% of their income back home. For smaller economies, remittances can represent as much as 10-30% of their GDP. Remittances are a stable source of funding and tend to play a countercyclical role, meaning they remain constant or increase during economic downturns in the migrants’ countries of origin, when private capital flows tend to decrease.
- Based on World Bank projections, remittances will decrease by 14% by 2021.
The EMN and OECD have been collaborating with the European Commission in order to provide information on how the pandemic is affecting migration in the EU and beyond useful to governments and policy makers. The result of the collaboration is a series of five Informs on measures taken at national and EU level in response to COVID-19 and their impacts on migration to address the negative consequences of the pandemic. Other topics include:
- Residence permits and migrant unemployment (July 2020);
- Impact on international students (September 2020);
- Impact on labour migration in essential sectors (October 2020); and
- Impact on return (January 2021).