Economic downturns, inflation hit remittances to Latin America

IDB fund forecasts money transfers made by migrants will decrease in real terms

For the first time this decade, remittances to Latin America and the Caribbean are expected to decrease in value due to the combined effects of economic downturns in the United States and Spain, inflation and a weaker dollar.

According to an analysis of recent remittance data by the Inter-American Development Bank’s Multilateral Investment Fund (MIF), migrants from Latin America and the Caribbean will send some $67.5 billion to their homelands in 2008, against $66.5 billion in 2007.

However, adjusted for inflation, this year’s total will be worth 1.7% less than the total sent in 2007, marking the first decrease in the value of remittances to Latin America and the Caribbean since the MIF started tracking these flows in the year 2000. Until last year, remittances to the region had grown by double digits every year.
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