Tuesday 6 December 2022

Global remittances will grow 7.3% this year boosted by Latin America

According to the World Bank, Mexico is the Latin American country that will receive the most remittances, about US$53 billion this year, which represents 42% of the total for the region.

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Q REPORTS (EFE) Global migrant remittances to developing countries will grow 7.3% this year, reaching us$589 Billion dollars, driven by the rise of 21.6% in sends destined for Latin America and the Caribbean, according to the latest forecasts. of the World Bank (WB).

According to the World Bank, Mexico is the Latin American country that will receive the most remittances, about US$53 billion this year, which represents 42% of the total for the region.

The five countries that will receive the most remittances this year are India, China, Mexico, the Philippines and Egypt.

The robust rebound forecast for this year comes after the 1.7% decline in 2020, amid the global recession caused by the Covid-19 pandemic.

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“Migrant remittance flows have largely complemented government cash transfers in support of families that suffered hardships during the crisis,” said Michal Rutkowski, director of Social Protection and Employment at the World Bank, in a statement.

For this reason, Rutkowski stressed that “facilitating these shipments to offer relief from household budget difficulties should be a key component of government policies.”

For the second year in a row, the WB report pointed out, migrant remittances will exceed the sum of foreign direct investment and international development assistance to these countries, with the exception of China.

The cost of remittances continued to rise, with an average of 6.4% of the amount, something that the international organization considers “too high”.

Contributing causes to the sharp rise in remittances include migrants’ ‘determination’ to support their families in times of need, as well as economic recovery in Europe and the US based on aggressive fiscal stimulus programs and employment protection.

By region, Latin America and the Caribbean is the one that is expected to register the greatest boom, with an increase of 21.6% compared to last year; followed by the Middle East and North Africa, with an increase of 9.7%; and South Asia, with 8%.

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In the region, Mexico will receive the most remittances, about US$53 billion this year, which represents 42% of the total for the region.

The World Bank indicated that a “significant” factor in the increase in Latin America is found in “the increase in the number of migrants in transit in Mexico, and in the remittances, they receive from abroad to defray their living and travel costs.”

Something similar occurs in Guatemala and Colombia, as well as Egypt and Morocco, transit areas for African and Middle Eastern migrants.

The importance of remittances is reflected in its strong weight in the economies of several Latin American and Caribbean countries, where it is around 20% of gross domestic product: such as Honduras (26.6%), El Salvador (26.2%), Jamaica (23.6%) and Guatemala (18%).

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