The inflow of remittances to India is expected to decline by 5 per cent in 2016 as weak economic growth and low oil prices in in countries where Indian workers are based have impacted the labour market and income, the World Bank said.

While India will still remain the top recipient of remittances in the world, the World Bank estimates that the total remittance flows to India in 2016 would come down to $65.5 billion from $69 billion in 2015.

“Remittances to the region (South Asia) are expected to decline by 2.3 per cent in 2016, following a 1.6 per cent decline in 2015. Remittances from the Gulf Cooperation Council (GCC) countries continued to decline due to lower oil prices and labour market ‘nationalisation’ policies in Saudi Arabia.

In 2016, remittance flows are expected to decline by 5 per cent in India and 3.5 per cent in Bangladesh, whereas they are expected to grow by 5.1 per cent in Pakistan and 1.6 per cent in Sri Lanka,” the World Bank said in its latest report on remittances.

The top recipients of remittances are, in nominal US dollar terms, India, China, the Philippines, Mexico and Pakistan and, in terms of remittances as a share of GDP, Nepal, Liberia, Tajikistan, Kyrgyz Republic and Haiti.

While weak economic growth and low oil prices have reduced remittances from Russia and Gulf Cooperation Council (GCC), the World Bank noted that structural factors such as the labour market ‘nationalization’ policies in some GCC countries and exchange controls in many countries faced with adverse balance of payments and falling international reserves have also impacted flows.