Growth in international remittances from migrants to their families in developing countries “slowed considerably” throughout 2015 as the collapse in oil prices hammered the global economy, according to the World Bank.

The slowdown in the growth of remittances last year is the most severe since the financial crisis of 2008 – and could lead to deeper impoverishment, and potentially even instability, in South and Central Asia. The declines are almost entirely attributable to the dramatic crash in oil prices and the resultant decline in commodity-linked currencies in resource-rich countries such as Canada and Russia, which has sapped the value of remittances sent home. But there is also indication that countries in the migrant-dependent Persian Gulf are coming under pressure as oil prices remain low.

“We knew about global economic weakness; we had seen a tendency of the U.S. dollar to strengthen against many economies,” says Dilip Ratha, manager of the World Bank’s migration and remittances unit. “But the oil price decline … this is the big wild card.”

Remittances to the developing world grew by just 0.4 per cent in 2015 – less than World Bank researchers predicted. That compares with 3.2 per cent growth in 2014, 4.9 per cent in 2013 and 11.4 per cent in 2010.

In Sri Lanka, although growth in worker remittances dropped from 9.6 per cent in 2014 to 0.5 per cent in 2015 (US$ 6,980.3 million), they have however recovered in 2016, recent Central Bank data showed. Accordingly, remittances rose 8% to US$ 554.2 mn in February 2016 and 7.6% to US$ 563.4 million in January 2016 compared to a year earlier, Sri Lanka’s Central Bank said.

Countries across South Asia also rely heavily on remittances, most of which flow in from the millions of their workers in the Gulf states. Pakistan gets nearly 7 per cent of its GDP from international remittances, Sri Lanka receives more than 9 per cent and Nepal gets nearly 30 per cent of its GDP from migrant worker remittances. Many of these countries saw reduced growth in remittance payments in 2015.

India remained the world’s largest recipient of remittances from abroad in 2015, despite a $1 billion drop from the previous year, the first such decline since 2009, the World Bank said.

Remittances into India constituted 2.9 times the foreign direct investment ($24.3 billion) in 2014. This declined to 1.75 per cent of foreign direct investment, or FDI ($39.3 billion) in 2015 (also due to a rise in FDI).  Other large remittance recipients in 2015 were China, with $64 billion, Philippines ($28 billion), Mexico ($25 billion) and Nigeria ($21 billion).