Workers’ remittances dip by 35% in July

Workers’ remittances continue to decline with July seeing a low of $ 453.3 million, down by a massive 35% from a year earlier.

The July dip also reduced the first seven months’ inflows growth to 2.6% to $ 3.77 billion.

In June, workers remittances inflow was $ 478 million, whilst in May, the figure was $ 460 million.

As of end-May, the year-to-date growth was a high 18% from the corresponding period of last year and it reduced to 11.6% in the first half. In June, the year-on-year drop was 16.4%.

In 2020, workers’ remittances increased by 5.8% to $ 7.1 billion compared to a decline of 4.3% in 2019 to $ 6.7 billion. The Government was originally expecting remittances to grow to $ 8 billion this year. 

The Central Bank attributed the 2020 growth to the increased stay period of migrant workers as a result of the closure of most international borders, increased use of formal channels, and a possible increase in the amount remitted by migrant workers to families in Sri Lanka to manage the pandemic-driven hardships.

However, the loss of momentum from April onwards was due to sharp disparity in rates offered by formal banking channels and the unofficial grey market prompting migrant workers to opt for the latter when transferring funds. Other analysts opined that the lower contribution could also be linked to reduced COVID-induced uncertainty following vaccinations in most countries where Lankan migrants are based in.