The outbreak of the COVID-19 pandemic and the substantial measures taken by EU and OECD countries to prevent the spread of the virus had consequences on remittances and the companies providing remittances services.
Remittances play a critical role in receiving countries and are typically used to increase and buffer household consumption, spend on health and education, alleviate credit constraint and start up small businesses. A decrease in remittances can be particularly damaging for the countries of origin of third-country nationals, as normally remittances tend to be countercyclical, meaning that they typically increase when the recipient economy undergoes a negative macroeconomic shock.
This joint EMN – OECD Inform reports on the impact of COVID-19 on international remittances in EU and OECD countries, since February 2020. After a brief summary of the background and context (section 3), the Inform will cover in detail each of three main drivers possibly impacting remittance flows: a) the economic
driver, b) the migration driver, and c) the disruptions affecting remittance service providers (section 4). It will explore the impact of the COVID-19 pandemic on remittances flows thus far and the available projections (section 5). It will also outline policy recommendations made at the international level to maintain the
flow of remittances as well as examples of measures which have been taken in the EU and non-EU OECD countries (section 6).