Remittances Hit All-Time High for the Fifth Time in 2021By Sofía Hanna | Tue, 12/07/2021 - 10:14
Remittances have reached an all-time high for the fifth time this year, reaching a total of US$4.82 billion during October. This growth was mirrored in other countries in Latin America and the Caribbean.
The increase in remittances to the region can be explained by the significant flow of migrants to the US, according to BBVA Research. This phenomenon has led to greater dynamism. During 2021, monthly remittances began breaking records in March with US$4.12 billion and climbed again in the following months, reaching US$4.53 billion in May, US$4.55 billion in July, US$4.75 billion in August and US$4.82 billion in October. Their growth in just October represents a 33.8 percent annual increase. In October, 12.5 million transactions were recorded for an average amount of US$384. Altogether, remittances have climbed to US$42.17 billion during 2021, an increase of 25.6 percent compared to the same period in 2020.
Their growth is not limited to Mexico. Remittance values in Latin America and the Caribbean are expected to increase by 21.6 percent in 2021. During the first stage of the COVID-19 pandemic, remittances globally decreased 2.3 percent but following the economic recovery, it is estimated that they will increase by 6.5 percent during 2021 and reach US$751 billion.
As explained in the BBVA paper, worldwide, there is a strong concentration of the monetary volume of remittances in ten countries: India (US$87 billion), China (US$53 billion), Mexico (US$52.7 billion), Philippines (US$36.2 billion), Egypt (US$33.3billion), Pakistan (US$33 billion), France (US$27.2 billion), Bangladesh (US$23 billion), Germany (US$19.6 billion) and Vietnam (US$18.1 billion).
Latin America and the Caribbean highly depend on remittances. For example, in 2021 they represented over 26 percent of the GDP of Honduras and El Salvador. For Jamaica, remittances are equivalent to 23.6 percent of the GDP and in Guatemala, Nicaragua and Haiti, they represent over 15 percent of the GDP. While Mexico is the third recipient of remittances in the world, “due to the size of its economy, its dependence on remittances is not as great as in other countries in the region. By 2021 it is estimated that remittances will represent 4.1 percent of its GDP,” said BBVA Research.