WASHINGTON, The World Bank Wednesday said that remittances to Latin America and the Caribbean (LAC) are estimated to have grown 9.3 percent this year to US$142 billion.
It said that data for the first nine months of 2022 show a 45 percent increase for Nicaragua, 20 percent for Guatemala, 15 percent for Mexico, and nine percent for Colombia.
The Washington-based financial institution said stronger employment of migrants from LAC in the United States contributed to remittance flows.
According to the World Bank, remittances received by migrants in transit also contributed to strong flows, and as a share of gross domestic product (GDP), remittances exceed 20 percent in El Salvador, Honduras, Jamaica, and Haiti.
In 2023, remittances will likely moderate to 4.7 percent growth due to a weaker economic outlook for the United States, Italy, and Spain. Sending US$200 to the region cost six percent on average in the second quarter of 2021, up from 5.6 percent a year ago, the World Bank said.
It said that remittances to low- and middle-income countries (LMICs) withstood global headwinds in 2022, growing an estimated five percent to US$626 billion, sharply lower than the 10.2 percent increase in 2021.
In its latest World Bank Migration and Development Brief, the World Bank acknowledged that remittances are a vital source of household income for LMICs.
“They alleviate poverty, improve nutritional outcomes, and are associated with increased birth weight and higher school enrollment rates for children in disadvantaged households. Studies show that remittances help recipient households to build resilience, for example, through financing better housing and to cope with the losses in the aftermath of disasters.”
The World Bank said remittance flows to developing regions were shaped by several factors in 2022. A reopening of host economies as the COVID-19 pandemic receded supported migrants’ employment and their ability to continue helping their families back home.
Rising prices, on the other hand, adversely affected migrants’ real incomes. Also influencing the value of remittances is the appreciation of the ruble, which translated into higher value, in U.S. dollar terms, of outward remittances from Russia to Central Asia.
“Migrants help to ease tight labor markets in host countries while supporting their families through remittances. Inclusive social protection policies have helped workers weather the income and employment uncertainties created by the COVID-19 pandemic.
“Such policies have global impacts through remittances and must be continued,” said Michal Rutkowski, World Bank Global Director for Social Protection and Jobs.
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