Global remittances will grow 7.3% this year boosted by Latin America, according to the World Bank

Global migrant remittances to developing countries will grow 7.3% this year, reaching US $ 589,000 million, driven by the rise of 21.6% in shipments destined for Latin America and the Caribbean, according to the latest World Bank forecasts ( BM).

The five countries that will receive the most remittances this year are India, China, Mexico, Philippines and Egypt.

The strong rebound forecast for this year comes after a decline in 2020 of 1.7%, amid the global recession caused by the COVID-19 pandemic.

“Migrant remittance flows have largely complemented government cash transfers in support of families that suffered hardships during the crisis.”, Said the director of Social Protection and Employment of the BM, Michal Rutkowski.

For this reason, Rutkowski stressed that “facilitating these shipments to offer relief from household budgetary difficulties should be a key component of government policies”.

For the second year in a row, the report of the BM, migrant remittances will exceed the sum of foreign direct investment and international development assistance to these countries, with the exception of China.

The cost of shipments continued to rise, with an average of 6.4% of the amount, something that the international organization considers “too high”.

Among the causes contributing to the sharp increase in remittances are the “determination”Of migrants in supporting their families in times of need, as well as the economic recovery in Europe and the United States based on aggressive fiscal stimulus and job protection programs.

By region, Latin America and the Caribbean is the one that is estimated to register the greatest boom, with an increase of 21.6% compared to last year; followed by the Middle East and North Africa, with an increase of 9.7%; and South Asia, with 8%.

Mexico It is the Latin American country that will receive the most remittances, close to US $ 53,000 million this year, which represents 42% of the total for the region.

The World Bank indicated that a factor “significant”Of the increase in Latin America is in“the increase in the number of migrants in transit in Mexico, and the remittances they receive from abroad to defray their living and travel costs”.

Something similar happens in Guatemala and Colombiaas well as Egypt and Morocco, transit areas for African and Middle Eastern migrants.

The importance of remittances is reflected in their strong weight in the economies of several Latin American and Caribbean countries, where around 20% of the Gross Domestic Product (GDP): such as Honduras (26.6%), El Salvador (26.2%), Jamaica (23.6%) and Guatemala (18%).