CentAm Remittance Flows Hold Up

Remittances to countries in CentAm increased 11% to $12.4bn last year, bucking the regional slowing trend, according to estimates by the IDB’s Multilateral Investment fund (MIF). Transfers to countries in the Andean region rose 5% to $11.6bn. Following a 6% drop in January remittances to Mexico year-on-year, MIF manager Donald Terry says that he could not predict whether this decline would continue or even spread to other countries, particularly in CentAm “We still don’t know for certain whether this is a short-term change or the beginning of a new direction,” he adds. “But if it were to become a trend, it will push millions into poverty.” Remittances have become a crucial source of income for many developing countries. In Guyana, these flows represent 43% of GNP; in Haiti 35%, in Honduras 25%, and Jamaica and El Salvador 18%, according to MIF. About three-quarters of the remittance flows to LatAm and the Caribbean come from the US. Spain and Japan are other major sources, the fund says.