A recent World Bank (WB) report estimates that remittances to Latin America and the Caribbean, sent mainly from North American and European countries, will have increased by 9.3% in 2022, reaching $142 billion.
“The growth in the employment of Latin American migrants in the United States contributed to remittance flows,” the World Bank said in a statement, in which it also highlighted the money sent by migrants in transit that contributed “to solid flows in Mexico and Central America.”
The data corresponding to the first nine months of 2022, according to the report, indicates an increase of 45% for Nicaragua, 20% for Guatemala, 15% for Mexico, and 9% for Colombia.
“Migrants helped ease the rigidity of labor markets in host countries while helping 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 continue to be applied,” said Michal Rutkowski, Director of the World Bank’s Social Protection and Labor Global Practice.
In addition, he highlights that remittances, as a percentage of gross domestic product (GDP), exceeded 20% in El Salvador, Honduras, Jamaica, and Haiti. While the outlook for 2023, according to the World Bank, remains at moderate growth rates, due to inflation and economic shocks that mainly hit countries that originate remittances.
“Remittances are likely to have more moderate growth, at 4.7%, due to less favorable economic prospects in the United States, Italy, and Spain. The cost of sending $200 to the region rose, on average, to 6% in the second quarter of 2022, compared to 5.6% registered the previous year, “explained the World Bank.
In El Salvador, the Central Reserve Bank (BCR) registers a cumulative, between January and October 2022, of $6,357 million, which represents an interannual growth of 3.7%, while at the end of the year the state entity estimates a projection of $7,200 million in remittance income. In remittances, we have a projection of 3.7% this year.
“Remittances are essential for the economy; they contribute to private consumption, that is, to family expenses,” said Douglas Rodríguez, president of the BCR. Said flow of remittances, according to data from the state bank, represents 26.2% of the country’s total GDP, figures that agree with those stipulated by the World Bank.