Slowdown in remittances could impact consumption demand: IndRa

by Yash Shah

India Ratings and Research (IndRa) said that recessionary pressures due to the Covid-19 pandemic and falling oil prices in gulf countries which have led to job losses and salary cuts globally have impacted remittances into India in a more structural manner and could further weaken aggregate consumption demand in the country. For India, gulf countries are the largest source of remittances, thus oil price has been recognised as the major driver for quantum of flows. According to the World Bank, global remittances are projected to decline by 20 per cent year-on-year in 2020 due to the economic crisis induced by Covid-19 pandemic.