SANTO DOMINGO. - Remittances to Latin America and the Caribbean are estimated to have increased by 9.3% in 2022, totaling US$142 billion.
Data for the first nine months of 2022 indicate an increase of 45% for Nicaragua, 20% for Guatemala, 15% for Mexico, and 9% for Colombia.
The growth in employment for Latin American migrants in the United States contributed to remittance flows. In turn, remittances received by migrants in transit also contributed to strong flows in Mexico and Central America.
Remittances, as a percentage of GDP, exceeded 20% in El Salvador, Honduras, Jamaica, and Haiti. In 2023, remittances are likely to experience more moderate growth of 4.7%, due to less favorable economic prospects in the United States, Italy, and Spain.
The cost of sending US$200 to the region rose, on average, to 6% in the second quarter of 2022, compared to 5.6% the previous year.
Poverty Alleviation:
Remittances are an essential source of income for households in low- and middle-income countries. They alleviate poverty, improve nutritional outcomes, and are associated with higher birth weight and school enrollment rates among children from disadvantaged households.
Studies indicate that remittances help recipient households strengthen their resilience, for example by financing more suitable housing, and enable them to cope with losses after a disaster.
Remittance flows to developing regions were affected by several factors in 2022. As the COVID-19 pandemic subsided, the reopening of recipient economies supported migrant employment and their ability to continue helping their families back home.
The rise in prices, on the other hand, adversely affected migrants' real income. Another factor influencing the value of remittances is the appreciation of the ruble, which resulted in a higher value, in terms of US dollars, for remittances from Russia to Central Asia.
In the case of Europe, the weakening of the euro had the opposite effect, reducing the US dollar value of remittance flows to North Africa and other countries. In countries that experienced foreign currency shortages and established multiple exchange rates, remittance flows
Source: Listín Diario.
