The money transfers of workers in developed countries to their families in Latin America and the Caribbean grew 25.3% in 2021 compared to the previous year, indicates a World Bank report published on Wednesday, which estimates that remittances to the region will continue to increase.
Officially recorded money transfers to Latin American and Caribbean countries last year reached $131 billion. The rebound was generalized, although especially notable in shipments from the United States and, to a lesser extent, from Spain.
“The package of US economic stimulus” to face the covid-19 pandemic declared in 2020 “contributed to the growth of remittances, since it had positive effects on job creation,” says the World Bank in its latest report on migration and development.
“With better prospects for the labor market in the United States, the flows of remittances to the region continue to grow at 9.1% in 2022 and 7.7% in 2023,” he adds.
The world bank experts However, they do not rule out deterioration. Downside risks include a resurgence of the pandemic, the impact of the war in Ukraine, political uncertainties, inflationary pressures and a slowdown in global growth.
Several countries posted double-digit remittance growth rates in 2021, including Guatemala (35%), Ecuador (31%), Honduras (29%), Mexico (25%), El Salvador (26%), Dominican Republic (26 %), Colombia (24%), Haiti (21%) and Nicaragua (16%).
“Remittances are important as a source of foreign currency for many countries, where these flows represent at least 20% of GDP, such as in El Salvador, Honduras, Jamaica and Haiti,” says the World Bank.
And he warns that many Central American and Caribbean nations would have suffered a current account deficit if it were not for the remittances of their workers abroad.
It also highlights the “exceptional” increase of 10.9 billion dollars in flows to Mexico in 2021, 25% more than in 2020.
“The most likely explanation is an increase in migrants in transit in Mexico, coming from Honduras, El Salvador, Guatemala, Haiti, Venezuela, Cuba and other countries,” he explains.
“To pay for their living and travel costs, including fees for illegally crossing the border into the United States, migrants in transit must receive remittances from outside of Mexico,” he points out, estimating that this group also includes Mexican migrants.
With a total of 54,000 million dollars of income from remittances in 2021, Mexico is among the five countries in the world that received the most transfers last year, ranking second after India, and replacing China, which was third followed by Philippines and Egypt.