Recovery of the US and Spain, key for shipments to Latin America: IDB

The recovery of the economies where migrants from Latin America and the Caribbean reside has been decisive in boosting remittance flows to their countries of origin, warned the migration data specialist and administrator of the Inter-American Development Bank (IDB) data portal. Jeremy Harris.

It refers specifically to the accelerated reactivation experienced in 2021 by the United States, the country where originators of remittances to Mexico and Central America reside, as well as the better economic situation in Spain, from which a significant proportion of transfers flow to the rest of the world. Latin America.

Interviewed by El Economista, he maintained that the strengthening of the labor market in the countries that originate remittances has been an engine for the solidity that remittances continue to show.

The IDB’s perspective is that the flow of remittances will continue to grow this year and next, but will begin to moderate towards the usual trend prior to the pandemic.

It found as risk factors, which can impact the purchasing power of remittances, inflation and as well as some displacement in the exchange rate.

Remittances to migrants in transit, difficult

The expert ruled out that the flow of remittances to migrants in transit through Mexico could explain the 27% increase in transfers observed in 2021.

Taking official data from the Bank of Mexico, the official explained that 51.594 million dollars entered the country, an amount that exceeded the historical flow received in 2020. This is just over 40% of the transfers received throughout Latin America and the Caribbean. , he nuanced

The incentive of migrants in the region is to reach the countries of the northern triangle and granting that there was a flow of remittances to this group of migrants, it would be difficult to confirm it with hard data, since Banco de México does not report the nationality of the recipients in Mexico.

Current expenditure, main use

Likewise, the expert maintained that the transfers that reach the households receiving remittances continue to be used for current spending. He referred as an anecdotal experience that after the 2009 crisis, remittance senders in the United States managed to generate savings to send resources to their countries of origin when an adverse shock occurred. But he does not have conclusive information to suppose if the remittance recipients gave another use to the transfers captured after the pandemic.

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