Drop in Remittances Raises Credit Risk in Low and Mid-Income Economies

Source: The National

A global drop in remittances by migrant workers due to the coronavirus-induced recession will raise credit risk in countries most dependent on such inflows, according to a new report by Moody’s Investors Service.

“The countries that are most dependent on remittances are largely low- and middle-income economies, and we expect the decline in remittances will exacerbate the growth slowdown in these countries,” said Christian de Guzman, senior vice president at Moody’s.

Global remittances to low and middle-income countries reached a record high of $554 billion (Dh2.03 trillion) in 2019, but are expected to fall by $110 billion this year, Moody's said in its report.