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Developing Countries Concerned Over Drop in Remittances


The financial crisis that has sent unemployment soaring in some of the world's largest economies also is striking an indirect blow at developing nations.

For some developing countries, money sent home by their migrant workers makes up a significant part of the gross domestic product. But rising unemployment is cutting these vital funds.

The World Bank says the flow of remittances could fall as much as six percent this year in nations as diverse as the Philippines, Mexico and Tajikistan.

The recession also is hitting the world's largest economy harder. One report Wednesday shows layoffs nearly tripled in December, compared with the same time a year earlier. A report by other business experts shows private U.S. companies cut almost 700,000 jobs during the month.

These reports come as most economists predict the U.S. unemployment rate will rise to around seven percent when official figures are published Friday.

German officials say that country's jobless rate now stands at 7.6 percent, with more than three million Germans out of work.

Denmark also is feeling the effects of the slowing global economy. Danish officials say 430 companies filed for bankruptcy in December, a 148 percent increase over the same time last year.

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