Workers’ remittances to SL likely grow at slower pace next year amid low oil prices: WB

• By Nishel Fernando

The pace of recovery in official workers’ remittance inflows to Sri Lanka witnessed during this year is unlikely to continue into next year with inflows projected to reach US$ 6 billion in 2024 amid possible low oil prices translating to fewer new employment opportunities in the key Gulf region, according to the World Bank (WB).
“Recovering after two years of a continuous and steep decline, remittance flows to Sri Lanka are expected to continue to increase to US$ 6 billion in 2024, although growth is projected to moderate to 11 percent from its peak in 2023,”WB outlined in its latest Migration and Development Brief.

“In addition, while the growth outlook in the GCC countries is positive, new job creation for South Asian migrants in 2024 is expected to be constrained by low oil prices.,” it added.
As per WB estimates,workers’ remittance inflows to Sri Lanka are unlikely to make a full recovery, falling short of the pre-pandemic and pre-crisis peak of US$ 7.1 billion.
The cumulative workers’ remittance inflows to Sri Lanka surged by a record 62.9 percent YoY to US$ 5,399.8 million in the first eleven months of the year. 

Hence, the country is on the path to overperform the WB’s projected US$5.4 billion figure for the full year which would mean a possible marginal growth in workers’ remittances in 2024.
According to the provisional data, total departures for foreign employment during first 10 months of this year amounted to 249,429 persons in comparison to record 311,056 departures in 2022.
WB identified the improvements in the domestic economic conditions along with IMF-backed policy measures as one of the key reasons for the near normalisation of the official inflows after falling to US$ 3.8 billion in 2022.

“With improvements in domestic economic conditions following the implementation of IMF-supported policy programmes, migrants’confidence in the official banking system seem to be gradually increasing as evident in more remittances being sent through formal channels,” it said.
WB also expects the growth in workers’ remittance inflows to the South Asia region to moderate to 5 percent in 2024 from the estimated 7.2 percent in 2023.