Where did remittances go?


17th July 2014

Remittances continued to grow slowly this year – a sign of slow pick-up in developed economies.
By Santiago Gutiérrez
Last year remittances to Latin America grew at a slow pace. The total for 2013, estimated at $61.3 billion, grew by only 1.1% from the previous year, a percentage that in part is a reflection of the still weak recovery in the developed economies. However, this rate was substantially better than the 0.6% increase that was reported between 2011 and 2012. These are results fromLBC’s annual ranking on remittances, which is based on information from the IDB, the Multilateral Investment Fund, the International Monetary Fund and LBC itself.
The lackluster growth rate is largely explained by the lower money flows to Mexico – which is the largest recipient of remittances in the hemisphere, and to Brazil, and stagnant transfers to Colombia. Last year remittances of Mexicans abroad to families in their home country fell by 3.8%; those of Brazilians fell 18.4% – the biggest drop in the region, and those of Colombians were virtually unchanged from the previous year.
However, in all the countries where remittances are an important part of their economy, thesemoney flows increased last year. In Haiti, where they account for 23.8% of GDP, remittances rose 1.5%. In Honduras, where they are 16.6% of GDP, they grew a surprising 7.8%. El Salvador, Jamaica, Guyana, Nicaragua and Guatemala also registered positive figures. In these five countries, remittances …

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