Sri Lanka worker remittances up 25-pct in July 2020
ECONOMYNEXT – Sri Lanka’s foreign remittances hit a high of 702.1 million US dollars in July 2020, rising 24.9 percent from a year earlier after dipping to 375 million dollars in April amid Coronavirus lockdowns in most Western and Middle Eastern countries, official data shows.
The surge in July follow dips in March, April and May 2020 amid severe lockdowns, when man were unable to visit banks or remittance houses to send money home, which may account for the surge when lockdowns were relaxed, analysts say.
In several Middle Eastern countries expat workers have lost jobs, in construction and hotel sectors in particular and they are waiting to come home.
However those that are employed say are also partially confined to home or working from home and are saving more money as many leisure activities and travel is curtailed, prompting them to send more home than earlier.
Sri Lanka’s foreign remittances started to climb in first quarter of 2020, for reasons that are not clear, after being stagnant or falling in recent years the domestic labour market tightened and restrictions were placed on females going abroad.
Sri Lanka’s currency collapsed in 2018 and growth fell after pro-cyclical liquidity injections made by the central bank as the credit system recovered from a 2015/2016 crisis.
Episodes of currency depreciation tends to reduce real domestic wages and also kill domestic consumption and economic growth, which worsens unemployment.(Colombo/Sept20/2020)