Remittances to Latin America, Caribbean reach record US$155B in 2023

Nov 17, 2023 News

Kaieteur News – Remittances received by Latin American and Caribbean countries are projected to reach a record US$155 billion in 2023 if the trends observed to date continue, according to a new report by the Inter-American Development Bank.

This is an increase of 9.5% compared to the $142 billion received in 2022, completing fifteen consecutive years of growth. The sustained growth of remittances reflects new intraregional migratory flows and the contribution that migrants make to their countries of origin. Despite a moderate increase between 2017 and 2019 and the extraordinary growth in 2021 (26.7%) during the COVID-19 pandemic, remittances to Latin American and Caribbean countries have shown sustained growth of around 10% annually for the past 10 years.

This increase in 2023 is mainly explained by the growth in remittances received by Central American countries (13.2%), the growth in remittances received by Mexico (9.8%), and the growth in remittances that South America received (7.9%). In the case of the Caribbean countries, growth in 2023 is more moderate (2.6%).

This new report by the Inter-American Development Bank also offers a detailed analysis of the origins and destination of remittances to the countries of the region based on data published by the Central Banks. The amount estimated 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.

The South American region showed significant growth in remittances received during the first half of 2023, reaching a growth rate of 7.9% compared to the same period of the previous year. Projecting this growth trend forward to the end of the year, the South American region will receive 29.5 billion dollars in 2023 (Figure 4).

During the first half of 2023, the remittances flow that grew the most in the South American4 region corresponded to Argentina (26.3%), as a response to the strong devaluation faced by that country’s currency. Such devaluations increase the value of dollar-denominated remittances leading migrants to send more resources to support their families.

At the same time, the remittances that Paraguay received grew by 20.3% in response to those same changes in the Argentine economy, as Paraguayan emigrants in Argentina sent more remittances as a way to protect their income from the strong devaluation. Brazil showed negative growth rates (-8.7%) due to comparison of this year’s growth with the unusual growth observed in 2022 (22.5%). Unlike the other subregions, in South America in aggregate, less than half of the remittances received come from the United States (35.7%). On the other hand, 36.2% of the remittances received originate in Europe, of which 19.7% come from Spain. Around 19.5% come from intraregional sources within South America such as Argentina (8.4%), Chile (7.6%) and Brazil (3.5%).

For several individual South American countries, the United States represents the main source of remittances, as in Ecuador (67.8%), Guyana (69.1%), Peru (56.5%), Colombia (53.4%), and Uruguay (39.5%). In the latter case, a similar share of remittances is received from Spain (32.9%). For Paraguay, the main source of remittances is Spain (58.6%), while Bolivia has other countries in the same region as the primary source of the remittances they receive (26.2%), mainly Argentina, Brazil, and Ecuador. In 2023, the South American region was the recipient of 18.9% of the remittances that arrived in LAC, a slightly lower share (-0.3%) than that observed in the previous year.

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Caribbean, Central American, Latin America, Remittances, South America

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