Remittances in times of financial instability

Robert W. Meins Remittances Specialist, Multilateral Investment Fund (MIF) Inter-American Development Bank (IDB)

2007: $ 66.5 2008: $ 67.5 (est.) + 1.5 %

Economic situation
Immigration climate
Exchange rates
Inflation

Source: US Census (CPS)

Source: World Bank

Source: New York Times

Source: European Central Bank Period of rise in remittances from Europe Rapid appreciation of the dollar

Source: Orozco 2007

Remittance data continues to improve, but is not yet perfect
Remittances are a family obligation, not driven by profit motives
LAC remittances likely to rise +/- 1.5 % in nominal terms
Crisis-related dollar appreciation will increase remittances in local currency terms in countries with free floating currencies.
$67.5 billion will be received by Latin American families in 2008.
80% spent on consumption 20% on savings and investment.
Remittance receipts remain a largely unused source of liquidity

Economic situation: Further economic slowdown affecting industries important to migrant workers
Migration climate: Negative immigration climate in broader range of sending countries. Continuing rise in Hispanic unemployment.
Exchange rates: Depreciation of the Euro
Inflation: Sustained rise in food/fuel costs

Remittances have been and will continue to be relatively stable financial flows
Relative importance of intraregional remittances likely to increase.
Once the global economy begins to recover, so will remittance growth

Robert W. Meins
Remittances Specialist
+1 (202) 623 1325
[email_address]

Remittances in times of financial instability

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Remittances in times of financial instability Presentation Transcript