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Caribbean countries register record remittances in 2021

The World Bank says remittance flows to Latin America and the Caribbean (LAC) surged to US$131 billion in 2021, up 25.3 percent from the previous year.

The Washington-based financial institution said the increase is due to the strong job recovery for foreign-born workers in the United States.

It said Haiti, with 21 percent, was the only CARICOM country to have registered double-digit growth rates while Guatemala led with 35 percent.

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“Remittances are important as a source of hard currency for several countries for which these flows represent at least 20 percent of GDP (gross domestic product), including El Salvador, Honduras, Jamaica, and Haiti.”

According to the World Bank figures, Haiti received US$4.4 billion in remittances last year, representing 20 percent of GDP, while Jamaica received US$3.6 billion, representing 24 percent of GDP.

Dominica, Belize and St. Vincent and the Grenadines registered 10.2, 7.8, and seven percent of GDP last year, according to the figures.

The World Bank said for this year, remittances are estimated to grow by 9.1 percent, though downside risks remain.

It said the average cost of sending US$200 to the region was mostly unchanged at 5.6 percent in the fourth quarter of 2021 compared to a year earlier.

The World Bank said officially recorded remittance flows to low- and middle-income countries (LMICs) are expected to increase by 4.2 percent this year to reach US$630 billion and this follows an almost record recovery of 8.6 percent in 2021.

In its latest Migration and Development Brief released Thursday, the World Bank said remittances to Ukraine, which is the largest recipient in Europe and Central Asia, are expected to rise by over 20 percent in 2022.

However, remittance flows to many Central Asian countries, for which the main source is Russia, will likely fall dramatically. These declines, combined with rising food, fertilizer, and oil prices, are likely to increase risks to food security and exacerbate poverty in many of these countries.

“The Russian invasion of Ukraine has triggered large-scale humanitarian, migration, and refugee crises and risks for a global economy that is still dealing with the impact of the COVID pandemic,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.

“Boosting social protection programs to protect the most vulnerable, including Ukrainians and families in Central Asia, as well as those affected by the war’s economic impact, is a key priority to protect people from the threats of food insecurity and rising poverty.”

In 2021, remittance inflows saw strong gains in Latin America and the Caribbean (25.3 percent), Sub-Saharan Africa (14.1 percent), Europe and Central Asia (7.8 percent), the Middle East, and North Africa (7.6 percent), and South Asia (6.9 percent).

Remittances to East Asia and the Pacific fell by 3.3 percent; although excluding China, remittances grew 2.5 percent. Excluding China, remittance flows have been the largest source of external finance for LMICs since 2015.

CMC/

 

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