Tough Outlook Forecasted for Remittance Inflows by the World Bank in 2021

The World Bank has recently updated its 2021 forecasts, predicting a continued decline in the remittances sector, with a potential loss of nearly $100bn from the highs of 2019. This forecast, however, is met with doubt by Daniel Webber, as expressed on his LinkedIn profile.

The weakened global economy and a continued weak oil price are the two main factors underpinning the 2021 forecasts. These factors have significant implications for the migrant economy in oil-rich countries like those in the Middle East and Russia.

The exact extent of the decline in 2021 remains uncertain, but the World Bank projects that countries heavily dependent on remittances, particularly in regions like the Middle East and parts of Africa, will experience the largest losses. However, specific country names are not yet available in the available search results.

The World Bank reports total cross-border principal estimates, not revenues. The results through the 10 months of 2020 for major remittance companies such as Western Union, MoneyGram, and Ria show high single-digit declines in revenues.

Another factor affecting the 2021 forecasts is the decrease in jobs, which leads to a decrease in remittances to the sector. With a weakened global economy, fewer migrants have income to remit home, further exacerbating the situation.

It's important to note that the numbers for 2021, according to the speaker, are likely to be incorrect due to the uncertainty in the world. The oil price's impact on the migrant economy and the remittances sector is significant, but the exact numbers for 2021 remain a matter of speculation.

The continued weak oil price is a factor underpinning the 2021 forecasts for the sector, as oil-exporting nations rely heavily on remittances. In 2020, the World Bank forecasted a 20% decline for the sector, a prediction that has proven to be challenging to accurately forecast.

Despite the uncertainty, it's clear that the remittances sector will face challenges in 2021, with potential losses in the hundreds of billions of dollars. The World Bank's updated forecasts serve as a reminder of the complexity and unpredictability of global economic trends.