REMITTANCE growth in the Latin America and Caribbean region slowed to 7.7 per cent in 2023, reaching US$156 billion, supported by a strong United States labour market.
This is according to the World Bank in its latest Migration and Development Brief released on Thursday.
Of the US$156 billion, Mexico received $66.2 billion, a 7.8 per cent increase, maintaining its position as the top recipient in the region.
The World Bank said growth varied widely, from a 44.5 per cent increase in Nicaragua to a 13.4 per cent decline in Argentina. The Washington DC-based multilateral organisation said flows to the region are expected to grow by 2.7 per cent in 2024.
Overall, it said that after a period of strong growth during 2021-2022, officially recorded remittance flows to low- and middle-income countries (LMICs) moderated in 2023, reaching an estimated $656 billion.
“The modest 0.7 per cent growth rate reflects large variances in regional growth, but remittances remained a crucial source of external finance for developing countries in 2023, bolstering the current accounts of several countries grappling with food insecurity and debt issues,” the report said. It highlighted that in 2023, remittances surpassed foreign direct investment and official development assistance.

“Looking ahead, remittances to LMICs are expected to grow at a faster rate of 2.3 per cent in 2024, although this growth will be uneven across regions.
“Potential downside risks to these projections include weaker than expected economic growth in high-income migrant-hosting countries and volatility in oil prices and currency exchange rates,” the report added.
“The resilience of remittances underscores their importance for millions of people,” said Dilip Ratha, lead economist and lead author of the report.

Meanwhile, the World Bank noted that sending remittances remains too costly. In the fourth quarter of 2023, the global average cost of sending $200 was 6.4 per cent of the amount being sent, slightly up from 6.2 per cent a year earlier and well above the UN Sustainable Development Goal target of 3 per cent.
“Leveraging remittances for financial inclusion and capital market access can enhance the development prospects of recipient countries. The World Bank aims to reduce remittance costs and facilitate formal flows by mitigating political and commercial risks to promote private investment in this sector,” said Ratha. (Loop News)