Remittances to Guyana in 2011 amounted to US$401 million, an increase of 7.2 percent over 2010, says a new report on remittances in Latin America and the Caribbean. It said remittance inflows to the region rose to US$61 billion, an increase of 6 percent.
This is according to the report ‘Remittances in Latin America and the Caribbean in 2011: Regaining Growth’ which the Multilateral Invest-ment Fund of the Inter-American Development Bank (IDB) released yesterday.
However, when the rate of exchange and inflation are taken into account, the real increase for Guyana’s remittances is whittled down to -2.2 percent.
As a percentage of GDP, remittances to Guyana in 2011 constituted almost 25 percent of the national economy, said the report. This is up from 2010, when remittances accounted for about 22 percent of GDP. Back in 2007, remittances represented about 17 percent of the national economy, the report said.
The report shows that historically, Guyana is second only to Haiti in terms of remittances as a percentage of GDP. It is however on par with Honduras, El Salvador and Nicaragua.
The report said that over the course of 2011, remittance flows to Latin American and Caribbean (LAC) countries showed signs of a solid recovery, reaching growth rates close to those recorded before the start of the global economic crisis.
“Since the last quarter of 2008, the increases in unemployment rates in traditional sending countries like the United States, Spain, and Japan, and the ensuing drops in incomes among LAC migrants had caused an unprecedented decline in the volume of remittances sent to the region. In 2010, remittances to LAC showed signs of stabilization, finishing on a positive growth trend that resulted in an annual volume that was slightly higher than the previous year,” the report said.
The report said that for the remittance market in LAC, 2011 was a year of renewed growth after the 2008-2010 period, despite persistent economic uncertainty in Europe.
“As seen in previous years, the volume of remittances received by each country depended largely on the number of migrants working abroad, their income levels, and economic conditions in recipient countries,” the report said.
It noted too that the macroeconomic outlook for sending and recipient countries offers some elements to guide projections of future flows. “The relatively positive outlook for the United States, source of approximately three quarters of the remittances sent to the region, is a positive indicator of remittance growth in 2012 at the aggregate regional level,” the report said.
“Projections for growth in output and in employment in the U.S. economy, and for decreases in unemployment rates, suggest that economic conditions for the coming year could benefit migrants living in the U.S. which may lead to an increase of the flow of outbound remittances, especially to Mexico and Central America,” it said.
“Remittances remain a major source of income for many countries in this region. In several of the smaller and poorer nations, they far exceed external aid and net foreign direct investment,” said an IDB press release accompanying the report.
“Last year’s increase confirmed the upward trend in migrants’ money transfers that started in mid-2010, after the double digit drop in remittances recorded in 2009 as a result of the economic crisis. In 2011, nearly every country in this region received a greater dollar amount in remittances than the previous year,” the release said.
