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Every year on June 16, the International Day of Family Remittances is celebrated in commemoration of the work and effort of millions of people who work abroad and send money to their loved ones in their countries of origin.
According to a report presented by one of the leading companies in global payments, WorldRemit, in Latin America countries such as: Mexico, Guatemala, Honduras and Brazil experienced growth in 2022 exponential in sending remittances.
Mexico led the list, being in the world ranking the second largest recipient of family remittances, followed by China and India, with an annual total of $58.4 billion dollars, which represents 3.1% of its GDP. For their part, Guatemala, Honduras and Brazil also surpassed the 10% growth barrier.
For families in Latin America, remittances are an important source of income, according to Daniel Hernández, Engagement Leader for WorldRemit in most cases, remittances are used to cover basic needs such as food, housing and educationbut also for productive investments such as the creation of small businesses.
Therefore, the impact that this phenomenon has both for Latin American countries and for the global economy is significant, since They represent a source of foreign exchange and an important livelihood for many families.
The main countries sending remittances to the Latin American and Caribbean region are the United States, Spain and Canada, being migration the main driver of this flow of money which only in 2022 reached 142 billion dollars.
The director for the Americas at WorldRemit, Jorge Godínez Reyes pointed out that “remittance flows in the region continue to exhibit a resilient trajectoryon the rise, with several countries in the top ten reporting record remittance flows despite the challenging economic climate and rising inflation,” he said.
Inflation and the reduction of remittances
Since last year inflation has been one of the most worrying issues for immigrants, the complex economic situation with the increase in the cost of living has significantly affected people who send money to their families abroad, the high price of food, basic services and rents has reduced the amount available for remittances from their budgets.
However, Hernández specified that 72% of immigrants who send remittances from the US to their relatives abroad, sought a second source of money, in order not only to cover their expenses, but also to continue financially supporting their your loved ones.
WorldRemit delved into the research on the cost of living and detailed in the report that 45% of senders in 2022 restricted the sending of remittances only direct family members, since 82% of those same respondents assured that the cost of living of those who receive the money had also increased.
Despite this situation, it is expected that by 2023 Latin America and the Caribbean will be the leading region in receiving remittances, projections indicate that it will have a growth rate of 4.7%according to Godínez who also assured that “this positive outlook means that remittances will continue to provide financial support to help families overcome economic challenges,” he said.
Keep reading:
- Inflation in the US stood at 4.0% in May, the lowest figure in two years
- Price of the dollar this June 15 in Mexico, Honduras, Nicaragua, Costa Rica, the Dominican Republic and Venezuela
- Immigrant remittances hit a new all-time high