Photo: Latin America
Remittances to Latin America and the Caribbean (LAC) showed a slight increase in 2012 with respect to the previous year, according to the latest report on remittances by the Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank Group.
The report, “Remittances to Latin America and the Caribbean in 2012: Differing Behavior among Sub-regions,” said that the region received a total of $61.3 billion in remittances last year.
This amount represents a year-on-year increase of $300 million, a 0.6 percent increase from 2011. After a historic high of nearly $65 billion in 2008, and a 15 percent drop due to the financial crisis in 2009, money transfers to the region have stabilized.
Remittances inflow trends varied among countries in Latin America and the Caribbean. While remittances to South American countries and Mexico decreased by 1.1 percent and 1.6 percent, respectively, the countries in the Caribbean displayed modest growth and Central American nations experienced a significant increase of 6.5 percent in the total remittances received. This increase helped offset decreases in bigger countries, allowing for the region as a whole to end the year with slight growth.
The economic uncertainty and sluggish labor market in Europe continue to affect the amount of money migrants in Spain are able to send back home, while the improvements in the labor market in the United States largely explain increases in remittances to certain countries, particularly in Central America.
Mexico remains the largest remittance recipient with $22.4 billion, followed by Guatemala, with $4.8 billion, and Colombia receiving $4 billion, while El Salvador and the Dominican Republic received $3.9 and $3.2 billion respectively.
Remittance flows continue to represent an important source of foreign inflows in many of the countries in the region, and constitute more than 10 percent of the gross domestic product in several countries, including Haiti, Guyana, Honduras, El Salvador, Nicaragua, Jamaica and Guatemala.
These flows also represent an important source of income for the millions of families in the region that receive the transfers to cover basic needs and invest in education, health, housing, and small businesses.