The World Bank said on Monday that remittance flows to developing countries are expected to be US$304 billion in 2009, down 7.3 percent from an estimated US$328 billion in 2008.

According to the World Bank, remittances are relatively resilient because the migrants living overseas have been relatively unaffected by the global financial crisis, though new migration flows have declined.

However, sources of risk to the outlook include uncertainty about the depth and duration of the current crisis, unpredictable movements in exchange rates, and the possibility that immigration controls may be tightened further in major destination countries.

"There is a risk that rising unemployment will trigger further immigration restrictions in major destination countries. Such restrictions would curb remittances more than forecast," said Hans Timmer, director of the World Bank's Development Prospects Group.

Remittances have slowed down since the last quarter of 2008. In line with a recent downward revision in the World Bank's forecast of global economic growth, the new update on the remittance flows highlights the impact of the present financial crisis and describes broad regional and country specific trends.

The new forecasts show a 6.9 percent decline in remittances for the Latin America and Caribbean region, mainly due to a slowdown in the US construction sector. Sub-Saharan Africa is also likely to experience a 8.3 percent slowdown in its remittance flows.

However, flows to South Asia and East Asia have been strong; but remittances are expected to decline somewhat in 2009.

India, China and Mexico retain their position as the top recipients of migrant remittances among developing countries.

Smaller economies such as Tajikistan, Moldova, Tonga, Lesotho, and Guyana are the top recipients in terms of the share of remittances in the GDP. Remittances exceeded a quarter of the GDP in these countries.

"Remittances provide a lifeline to many poor countries," said Dilip Ratha, lead economist in the Development Prospects Group of the World Bank.

"Even a small decline of 7 percent or 10 percent can pose significant hardships to the people and to governments, especially those facing external financing gaps."

"Reducing remittance fees and developing innovative tools to leverage remittances for financial inclusion and capital market access should be a part of our response to the financial crisis," he added.

(Xinhua News Agency July 14, 2009)