Remittances to Latin America Recover- but Not to Mexico
Washington, DC [CapitalWirePR] November 15, 2013 – Remittances to Spanish-speaking Latin American countries overall have recovered from a decline during the recent U.S. recession, with the notable exception of Mexico, according to a Pew Research Center analysis of World Bank data.
Migrants’ remittances to Mexico, an estimated $22 billion in 2013, are 29% below their 2006 peak. For all other Spanish-speaking Latin American nations, the 2013 estimate of $31.8 billion slightly surpasses the 2008 peak.
Remittances to Spanish-speaking Latin American countries, including Mexico, have more than doubled since 2000, but remain below their peak in 2007, the year the Great Recession began in the U.S. The 2013 estimated total ($53.8 billion) is 13% below 2007’s $61.6 billion (in 2013 U.S. dollars).
The United States is the most important source of money sent home by migrants to the 17 Latin American nations as a group that are the focus of this report. U.S. remittances accounted for three-quarters of the total in 2012—-$41 billion out of $52.9 billion.
The decrease for Latin America overall was fueled by a falloff in remittances to Mexico, which receives more than 40% of all remittances to Latin America. By contrast, of the dozen other nations with remittances of more than $500 million a year, seven—-Bolivia, El Salvador, Guatemala, Honduras, Nicaragua, Paraguay and Peru—-are estimated to have higher remittances in 2013 than during the recession. Flows have not recovered from recession-era declines in Argentina, Colombia, Costa Rica, Dominican Republic and Ecuador.
The decline in remittances to Mexico—-98% of which come from the U.S.—-is linked to economic changes in the U.S., where one-in-ten Mexican-born people live. The U.S. housing market crash hurt Mexican immigrants for whom the construction industry is a major job source. Another factor could be the decline in the Mexican immigrant population in the U.S. since the onset of the recession, due to decreased arrivals and increased departures, including deportations.
Remittances from the U.S. to Spanish-speaking Latin American countries are concentrated in countries closest to the U.S. border. Mexico alone receives more than half—-$23 billion in 2012. The share rises to four-fifths when Guatemala ($4.4 billion), El Salvador ($3.6 billion) and Honduras ($2.6 billion) are added.
Among the other findings in the report:
The US. accounted for 78% of remittances to Latin America in 2012. Spain, the next-largest sending nation, contributed 8%, or $4 billion. Canada, which ranked third, sent 1%. Remittances are a larger source of money to Latin America than official foreign aid. In 2011, when foreign aid to Spanish-speaking Latin America nations totaled $6.2 billion, formal remittances were more than eight times that—-$53.1 billion. Money sent home by migrants represents a varying share of the gross domestic product throughout Spanish-speaking Latin America. The highest shares are in El Salvador (16.5% in 2012), Honduras (15.7%) and Guatemala (10.0%). Remittance totals are strongly linked to the size of a particular country’s immigrant population in the U.S.
The Latin American nations that get the highest share of their remittances from the U.S.—-Mexico, El Salvador, Guatemala and Honduras—-also are the top four in terms of the share of their emigrants who live in the US. The U.S. is the largest source of remittances worldwide, sending a total of $123.3 billion in 2012. Saudi Arabia is next, followed by Canada. Among all countries, the largest recipient of remittances is India, with an estimated $71 billion in 2013. China ranks second, followed by the Philippines and Mexico.
This report is based mainly on data on remittances compiled by the World Bank, including overall trends for 2000 to 2013 as well as country-to-country flows for 2012. To add context to the remittance findings, the report also uses World Bank data on foreign aid and GNP, as well as 2012 estimates from the U.S. Census Bureau’s American Community Survey on the immigrant population in the U.S. from selected Latin American nations.
The report, “ Remittances to Latin America Recover – but not to Mexico”, authored by D’Vera Cohn, Ana Gonzalez-Barrera and Danielle Cuddington, is available at http://www.pewresearch.org/hispanic. .
Pew Research Center is a nonpartisan source of data and analysis. It does not take advocacy positions. Its Hispanic Trends Project, founded in 2001, seeks to improve understanding of the U.S. Hispanic population and to chronicle Latinos’ growing impact on the nation.