Remittances
are still going up

Declining oil prices

cause lower inflow growth

Remittance inflows to Lebanon are expected to increase 1.6 percent to $7.6 billion in 2016, according to The World Bank.

Remittances grew four percent in 2015 to $7.5 billion which represented 16 percent of the country’s GDP of the same year. A weakness in economic growth in the Gulf and declining oil prices are behind below-normal remittance growth.

“More worrisome are structural factors such as de-risking by commercial banks, and the labor market’s ‘nationalization’ policies in some GCC countries that discourage demand for migrant workers,” said a report by The World Bank.

Lebanon’s projected 2016 growth rate is higher than the average for low and middle income countries. Remittance flows to these countries are projected to increase by 0.8 percent in 2016.

They seem to have entered a ‘new normal’ of slow growth, The World Bank said.

Lebanon’s expected remittance growth rate for 2016 is basically the same as that of the Middle East and North Africa (MENA). Positive growth of remittances from the MENA is due to a low-base effect given the 5.7 percent decline in 2015.

Remittance flows to Lebanon surged 13 percent in 2013 then dropped five percent in 2014.

“Beyond 2016, [worldwide] remittances are expected to pick up only gradually,” The World Bank said.