US$58.9 billion received in 2010
Remittances to Latin America and the Caribbean are likely to rise this year after stabilising during 2010, although a weaker dollar and higher inflation are reducing purchasing power in many countries, according to the Inter-American Development Bank’s Multilateral Investment Fund (MIF).
Measured in U.S. dollars, money transfers made by Latin American and Caribbean migrants to their countries of origin reached US$58.9 billion in 2010, virtually unchanged from US$58.8 billion in 2009, when remittances saw a 15 per cent drop caused by the global economic crisis, the MIF said in a report released on Monday.
“Remittances remain a vital source of income for millions of families in the region, who depend on these flows to cover the cost of basic needs, such as clothing, medicine or food,” the report noted. “For many of these recipient families, 2010 was a year of increased economic vulnerability, since, with stronger local currency values and rising inflation, the remittances they received did not reach the same value of the previous year.”
Remittances uneven in sub-region
Last year’s total was significantly below the record US$69.2 billion reached in 2008. Expatriates started sending less money home during the second half of 2008, a trend that accelerated over the following year as the countries in which most of them work (the United States, Spain and Japan) fell into recession caused by the global financial crisis.
However, during 2010, remittances to Latin America and the Caribbean started to stabilize, and even increase, albeit with significant differences among sub-regions. Money transfers to Central America recovered 3.1 per cent, as migrants’ employment and earning prospects improved in the United States. In contrast, remittances to Andean countries fell 4.1 per cent, reflecting the prolonged economic malaise in European nations, where many of these expatriates reside.
