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Economy & Business - August 2020

REGION: Pandemic stems flow of remittances

Remittances – money sent home by people living overseas to family and friends – traditionally provide something of a cushion in times of economic crisis for developing countries. Historical data has shown that remittances an be counter-cyclical, as migrants who know that family at home are struggling make an effort to send more money to tide them over. During the 2008-2009 global financial crisis, remittances to developing countries decreased by just 6%, compared to a 40% drop in foreign direct investment (FDI) and an 80% decline in private debt and equity flows to the same countries. However, the economic crisis produced by the coronavirus (Covid-19) pandemic is different and appears to also have impacted remittances.

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