If current trends continue, compatriots abroad will send 9.5% more in remittances to their Latin American countries of origin than last year, breaking the previous record. The Inter-American Development Bank estimates that shipments will total 155 billion in 2023, compared to 142 billion received in 2022. This would consolidate 15 consecutive years of consecutive growth. The IDB assures that, if remittances were a country, it would be the sixth largest economy in Latin America and the Caribbean.
The majority of family members who send money to countries in the region work in the United States, where the fiscal and monetary stimuli promoted by the Covid-19 pandemic continue to boost consumption and economic activity. This is one of the factors why remittances have grown in recent years. Furthermore, as the IDB report published on Wednesday points out, migrants improved their employment rates.
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“The estimated amount for the year reflects the increase in the income of migrants, who improved their employment rates, as well as the progress of the migration process in previous periods, which allowed an increase in the flows of remittances received by families in the countries of origin,” says the statement from the Washington-based multilateral.
Central America saw the highest growth in remittances, at 13.2%, followed by Mexico with 9.8% and South America with 7.9%. In the case of the Caribbean countries, growth in 2023 is more moderate, at 2.6%, highlighted the IDB.
“Mexico remains the main recipient of the region with 41.2% of the remittances that the region received, a slightly higher percentage (0.1 percentage points) than that observed the previous year,” the organization’s specialists wrote in a 27 page report.
The IDB assures that, taking into account that the number of emigrants from the region continues to increase, it is unlikely that remittance flows will fall in the foreseeable future. “Although Mexico and the countries of Northern Central America together represent more than half of the remittances received by the region, significant growth is still observed in several countries in other regions.
“The importance of the United States, Canada, and Spain as sources of remittances is evident, but several countries have relevant diasporas in other countries, and there are also significant intraregional flows,” the report says.
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