Sri Lanka faces a high risk of diminishing remittances from migrant workers in the Middle Eastern economies due to the crashing oil prices, warns Fitch Ratings on Friday.
In a brief on South Asia, Fitch Ratings said that workers remittance remains a vital source of hard currency for many Asian emerging economies, adding,
“Remittance inflows in the Philippines, Sri Lanka, Bangladesh, Pakistan and Vietnam are particularly strong relative to the size of their economies. The growth of remittance inflows is slowing in some of these countries, but absolute amount remains large and significant.”
Countries whose external accounts depend on remittance inflows will be vulnerable to disruptions in economies of the region.
“In this light, Fitch believes Sri Lanka is especially vulnerable to such disruptions, while Pakistan and Bangladesh are also relatively exposed, “ said the Ratings agency.
The agency caveated their forecast adding that though a lower demand of foreign workers in the middle East remains significant, it is yet to materialise.
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