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 global payment companies, World Remit, in Latin America countries such as: Mexico, Guatemala, Honduras and Brazil experienced exponential growth in remittances in 2022.
Mexico led the list, being the second largest recipient of family remittances in the world ranking, 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 income, according to Daniel Hernández, Engagement Leader for World Remit in most cases, remittances are used to cover basic needs such as food, housing and education, but also for productive investments such as the creation of small businesses.
The United States is one of the main countries for sending remittances to Latin America. The United States is one of the main countries for sending remittances to Latin America.
Therefore, the impact of this phenomenon both for Latin American countries and for the global economy is significant, since they represent a source of foreign currency and an important livelihood for many families.
The The main countries that send remittances to the Latin American and Caribbean region are the United States, Spain and Canada, with migration being the main driver of this flow of money that only in 2022 it reached 142 billion dollars.
The director for the Americas at World Remit, Jorge Godinez Reyes noted that “remittance flows in the region continue to exhibit a resilient, upward trajectory, with several countries in the top ten reporting record remittance flows despite the challenging economic climate and rising inflation,” he said.
Inflation and reduced 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 rentals 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 loved ones.
World Remit delved into the research on the cost of living and detailed in the report that 45% of remitters in 2022 restricted sending remittances only to immediate family members, since that 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 Godinez, who also assured that "this perspective Positive means that remittances will continue to provide financial support to help families overcome economic challenges,” he said.