Inflation seen as culprit in reduced remittances by migrants to their families

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A RECENT survey revealed that 82 percent of remittance senders agreed that the cost of living for the people that they send money to has risen since the start of the year.

Also, around 45 percent or almost half of the remittance senders surveyed said they now only send money to immediate family instead of friends and distant relatives, again citing rising inflation.

These were the highlight results of the second Cost of Living index by digital remittances company WorldRemit, a survey that sought to understand how the worsening inflation crisis has affected the lives of international money senders worldwide.

The survey further revealed that 1 in 9 people globally rely on money sent from friends and relatives who have migrated abroad for work. With several factors contributing to increased financial pressure, new data showed that 72 percent of respondents in the US, 41 percent in Australia, and 44 percent in the UK have taken up a side hustle (a job in addition to their main source of income), with 27 percent of respondents on average across our three markets indicating they did so to support the increase in their own cost of living.

Of the respondents who cited having a side hustle, 89 percent reported that they would maintain their side hustle in the next 12 months.

Households around the world are set to re-examine their spending habits in light of inflation, with more than a quarter of respondents (26 percent) saying that they are curtailing discretionary spending on entertainment such as dining out or going to the cinema or theatre. For example, in the UK, nearly two-thirds or about 65 percent of people noted concerns regarding the cost of utility bills, highlighting the change in spending habits of UK households as a result of the energy crisis.

The inventive solutions, such as side hustles, that we are seeing as a result of the current economic landscape point to the resilience of migrants and their commitment to financially supporting loved ones overseas,” said Jorge Godinez Reyes, Head of the Americas, WorldRemit. “These findings demonstrate the grit of economic migrants in adapting to wider financial stresses and the rising cost of living while still meeting the needs of their families at home, and abroad.”

The multi-country study was fielded in October 2022 to determine the ongoing effects of the increased cost of living on international money senders in the United States, United Kingdom and Australia, resulting in observations from 2,687 international remittance senders. Whilst there were minor differences, broadly speaking, first-generation migrants’ views were aligned with those of the overall sample in our survey.

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