The Impact of the Coronavirus Outbreak on the UK Economy

Brexit’s impact on remittance has been felt throughout the world. Last year, migrant workers in the UK sent home an approximate $24.9bn making it the fourth-largest source of remittances in the world. This year, the World Bank reported that the stirling has shrunk to 14.6 per cent and 13.2 per cent against the dollar and euro respectively. This means that people back home are receiving less for their money. The savings of migrant workers are thousands of euros less than they used to be before the Brexit vote. A weak pound means a drop in remittances, with migrants working harder and sacrificing other savings to make up for that decline.Impact of Brexit on Remittance-Receiving CountriesThe repercussions go way beyond individuals and families having to tighten their belts. The native countries of these recipients suffer, too. For 25 countries, remittances provides more than 10% of their GDP.Eastern EuropePoland, Hungary, Latvia, Slovakia, Czech Republic and other so-called EU8 countries that joined the EU in 2004 have become the second largest recipients of remittance flow from the U.K. after Germany. Remittance makes up between 3-6 per cent of GDP for many of these nations.In Hungary, the Magyar Nemzet reported that the GBP declined in value roughly HUF 70 since the UK voted to leave the European Union in June, and by HUF 100 since last November. Further deviation was expected by the end of this year. Remittances make up about USD 3.6 billion, or three percent of the total GDP of Hungary's economy, according to a report in Hungarian business daily Világgazdaság. In 2015, Time Magazine reported that Hungarians in the UK send back an annual average of USD 7,700 per economic migrant. The result could be several billions of forints in losses, according to the Magyar Nemzet report.Other Regions and Developing CountriesNigeria, India and Pakistan list among the top three countries that receive remittance from Britain. In 2015, Nigeria received almost $4 billion, India received $3.6 billion and Pakistan just over $1 billion. Each of these regions have fragile economies, and millions of people who depend heavily on remittance of overseas workers for support. Each has now have to had to acclimate themselves to a devalued pound and have come to expect a lot less than they used to.Although other countries such as Bangladesh, Pakistan and Nepal received less remittance from Britain than India, their more fragile economies make them more dependent on the remittance for substance. Respectively, remittance from UK makes up about 8.5 per cent, 7 per cent and 29 per cent of each of these countries GDP, respectively.In countries such as these, remittance pays for education, startups and healthcare. It, also, lifts families and communities out of poverty and spurs development. Kenya is another example of a region that lost millions of dollars in remittance, according to the UK-based think tank Overseas Development Institute (ODI) in September.The list of countries that suffered because of Britain’s devalued currency continues.The Future?Some experts believe that the fall of the stirling will prompt more migrant workers to leave Britain and fewer to move there. Jonathan Portes, an economist at the UK’s National Institute of Economic and Social Research adds that migrant workers may feel less welcomed making them less likely to stay and more likely to tell their friends to keep away.Other research by the UK’s Department for Work and Pensions found that many migrant workers in Britain relocated to healthier economies with stronger currencies during the 2007-09 financial crisis. Experts say that more migrant workers are likely to follow that pattern now.In short, the Center for Global Development predicts a dreary next two years where the UK economy may stagnate leading to a recession that will, further, lower the value of remittances.

Abound, a comprehensive super-app tailored for Non-Resident Indians (NRIs), has successfully secured $10 million in funding from the Times of India Group. This investment aims to bolster the app's remittance services, providing a more streamlined and cost-effective solution for expats.Nishkaam Mehta, the CEO of Abound, expressed in a press release on Monday that the primary objective of the app is to alleviate the complexities and high costs associated with traditional financial services for expats. He further emphasized that this borderless super-app is designed to cater to the distinct financial needs of Indian expats across various regions, enabling them to transcend geographical limitations and live their lives to the fullest.According to World Bank estimates from the previous year, remittances witnessed a 5% growth in 2022, reaching a staggering $626 billion. These transfers serve as a crucial financial lifeline for individuals sending money back home to their loved ones. Furthermore, with approximately 1.4 billion adults still without bank accounts, the need for innovative money transfer solutions is more pressing than ever.Abound, a venture of the Times of India Group and previously known as Times Club, is specifically crafted for Indian expatriates residing in the U.S. The app allows users to transfer funds to India without the hassle of long wait times or transfer fees. In addition to this, membership on the platform comes with a host of benefits including cash-linked and loyalty rewards, curated content, and access to both online and offline commerce. As more NRIs seek innovative financial management solutions, Abound positions itself as the ultimate all-in-one platform with features such as:Daily Shopping Rewards: Recognizing the significance of everyday spending for Indian expats, Abound offers a plethora of daily shopping rewards and cashback offers, enabling users to maximize their purchases.Exclusive Offers Across Categories: Abound provides its users with exclusive deals and offers across a wide range of categories, from groceries and entertainment to shopping and travel, thereby enhancing their lifestyle experiences.To commemorate the launch of its remittance feature, Abound is introducing a limited-time promotion for early adopters, offering an exchange rate of $1=₹83 for money transfers to India.Join the NRI community in ushering in a new era of financial management with Abound. The app is readily available for download on both Android and iOS devices, ensuring easy access and a seamless user experience.

According to recent data released by the central bank, Mexico received an impressive sum of nearly $5.7 billion in remittances during the month of May, setting a new monthly record. However, analysts caution that the strength of the peso against the dollar may have mitigated this achievement.Since the majority of remittances to Mexico originate from the United States, the value is recorded in dollars. Goldman Sachs analyst Alberto Ramos explains that "a strong peso hurts remittances," referring to the fact that the appreciation of the Mexican currency has an adverse effect on the funds received when converted from dollars to pesos.Interestingly, the peso has emerged as one of the top-performing currencies this year, appreciating over 13% against the U.S. dollar between May 2022 and May of this year.Due to the peso's appreciation, when measured in local currency, remittances actually experienced a 2.2% decline compared to the previous year, as stated by Ramos.Mexican President Andres Manuel Lopez Obrador has consistently highlighted the positive impact of remittances on the country's economy. The funds, primarily originating from the United States, have played a significant role in Mexico's economic growth.In 2022, Mexico recorded a record high of $58.5 billion in remittances from abroad, making it the second-largest recipient country, trailing only behind India.Despite the challenges posed by the "super peso," the dollar value of remittances sent in May increased by nearly 11% compared to the previous year.The latest data for May reveals a substantial jump of almost 14% compared to the previous month, resulting in a total inflow of funds reaching $24.67 billion this year.Notably, this amount surpasses the combined revenue generated by oil and agricultural exports during the same period, as noted by analysts at Mexican brokerage Monex.Analysts at Monex and BBVA attribute part of the May surge to the celebration of Mother's Day, suggesting that around 10% of the increased transactions can be attributed to this commemoration.The number of transactions in May experienced a 7% year-on-year increase, reaching a total of 14.56 million. Furthermore, the average amount per transaction rose by 3% to $391.Goldman Sachs' Ramos emphasizes that the strength of remittances reflects the robust U.S. labor market and visible wage growth, particularly in sectors where Mexican citizens are prominently represented.To compare today's best rates when remitting money to Mexico, use CompareRemit's easy-to-use USD to MXN exchange rate comparison tool!