Small recovery in regional remittances forecast for 2010
Published:Wednesday | November 10, 2010 | 12:00 AM
Remittance flows, which the World Bank described as "the lifeline" of many Latin American economies, is likely to close the year two per cent higher than last year's figures, new estimates show.
But the improvement is minor relative to the steep 12 per cent decline of remittances seen in 2009.
The World Bank on Monday said the expected gain this year was reflective of "a modest but steady recovery in the United States (US) and a continuing pattern of resilience to the effects of the global economic crisis of 2008-2009."
In its outlook for 2011 and 2012, the bank is even more optimistic about gains, saying remittances will grow to US$69 billion by the outlying year.
The two per cent growth this year is expected to be followed by a 7.6 per cent improvement in remittance flows in 2011 and another 10 per cent growth in 2010.
The largest receiving markets for remittances in Latin America this year are:
Mexico US$22.6 billion
(but third globally after India and China)
Brazil US$4.3 billion
Guatemala US$4.3 billion
Colombia US$3.9 billion
El Salvador US$3.6 billion)
Dominican Republic with US$3.4 billion)
Honduras US$2.7 billion
Jamaican remittances at August - the latest data available - have increased 7.4 per cent year to date, to US$1.25 billion.
The money transfers are largely from migrant workers who remit funds to family and relatives in their home countries. The World Bank noted that top migrant "corridors" in the Caribbean are Dominican Republic-US, Jamaica-US and Haiti-US; while the Latin American and Caribbean region's total stock of immigrants amount to 6.6 million or 1.1 per cent of the population compared to 215.8 million or 3.2 per cent for the world).
As a share of GDP, the top regional market was Honduras with remittances equating to 19.3 per cent of the economy; followed by El Salvador at 15.7 per cent; and Haiti 15.4 per cent.
"Exceeding or coming close to a fifth of the GDP, remittances in these countries provide a lifeline to the poor, especially in light of the decline of capital inflows," said Dilip Ratha, author of the report "Outlook for Remittance Flows 2011-12".
Ratha warned that persistent unemployment, volatile currencies and anti-immigrant sentiments in high-income countries could put the brakes on remittance flows but said that for the moment, there's an upwards tendency south of the US border.