Remittances to Latin America and the Caribbean in 2012: Differing Behavior across Subregions
This paper studies the remittances to the Latin America and Caribbean (LAC) countries in 2012 in comparison to previous year. It reports that there is practically no rate of growth at the regional level compared to 2011.For understanding the 'sending' countries effect on remittance flows, the paper takes into consideration rates of employment and unemployment, as well as the salary levels of migrants in the host country. For 'recipient' countries, exchange rate between the currency of the sending country and that of the receiving country, and changes in the price of goods and services are considered. The paper documents the following points:
- Remittances to South America decreased by 1.1%, reflecting the effects of the economic crises that still plague Europe, especially Spain;
- Caribbean displayed modest growth and Central America experienced a significant increase of 6.5% in the total remittances received;
- Mexico experienced a 1.6% drop in the volume of remittances received in 2012. This could be related to changes in migration flows and increases in the exchange rate between the Mexican peso and USD.
The paper concludes that stabilization in the growth of remittance flows to the region in 2013 may be suggested by the relatively stable macroeconomic projections for the US.