Inflation has impacted many workers, but those hoping to send remittance money to their loved ones overseas are feeling the pinch.
Inflations Affect Most Immigrants Who Use Remittances To Send Money (PHOTO: DealBook – The New York Times)
Remittances
Most countries count on migrant workers, described as someone who has migrated from their home country. Migrant workers can be seen in nearly every country in the world. Every year millions of workers send cash, in the form of remittances, to family and friends in other countries. These funds mean a significant economic force in low-income countries.
The US economy experienced hardship during the past two years, where inflation across markets for goods and services, and these economic crises have had a noticeable impact on the sending of remittances. Migrant workers who send cash to loved ones overseas are often saving less because they’re forced to spend more as prices rise. For some, the only option is hustling more, working during weekends and even at night, and taking on second jobs. For others, it means cutting back on once-basic items like meat and fruit so they can send what’s left of their savings to family back home, some of whom are struggling with hunger or conflict.
Inflation Leads To Economic Crisis In Low-Income Countries
Economies reeling from the shocks of the COVID-19 pandemic and the effects of climate change were hit again by Russia’s war in Ukraine, which sent food and energy prices soaring. As explained by the KNOMAD, a research organization focused on global migration, inflation in low and middle-income countries (LMIC) surpassed levels seen in high-income areas in 2022, driven by the “depreciation of local currencies, as well as a buildup in financial stresses.” Researchers documented that these conditions cut into the purchasing power of remittances while also increasing the demand for these funds overall.
Countries Receive the Most Remittances
In 2021, the top five biggest countries to obtain the most remittances were India, Mexico, China, the Philippines, and Egypt. Hence, Remittances are an essential factor in the global economy and help drive growth both at home and abroad. If developing nations create policies that can protect and provide assistance to their migrant workers, it may help support the growth of other countries, which are (in some ways) the recipients of migrants’ remittances.
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