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CHAMPION OF THE DAY
Remittances pick up
after two-year decline
Up three percent to $6.8 billion
Remittance inflows are expected to have increased by three percent in 2022 to $6.8 billion, according to the World Bank’s Migration and Development Brief. This represents a turnaround from a decline of four percent in 2020 and of five percent in 2021.
For countries in which remittances amount to a substantial share of GDP like Lebanon, “the receipt of funds from large numbers of overseas migrant workers is hoped to assist in sustaining household consumption and continuing to offset the severe effects of the crisis,” the World Bank said. Remittances are the largest financial inflow to the country and represent 60 percent of the aggregate of other classifications of inflows.
Source: World Bank
The decline in remittance inflows recorded in the two previous years was mainly due to the diversion of funding to informal channels, according to a report released last November by the Lebanon Crisis Analytics Team (LCAT) of Mercy Corps, the global humanitarian aid NGO. “Remittances are largely channeled through informal markets and subject to fluctuations in exchange rates and unclear pricing,” said the LCAT report titled ‘Understanding the limitations of remittances as an informal social safety net in Lebanon’. According to the report, informal inflows are likely to have increased due to the banking crisis.
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Dec 15, 2022
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