The World Bank says remittance flows into Latin America and the Caribbean (LAC) grew by 10 per cent to US$88 billion last year supported by a strong United States economy.
The Washington-based financial institution said Mexico continued to receive the most remittances in the region, posting about US$36 billion in 2018, up 11 per cent over the previous year.
The bank said that remittances to low- and middle-income countries, such as those in the Caribbean, reached a record high in 2018, estimated at US$529 billion, an increase of 9.6 per cent over the previous record high of US$483 billion in the previous year.
Global remittances, which include flows to high-income countries, reached US$689 billion in 2018, up from US$633 billion in 2017, the World Bank added.
It said that for this year, remittance flows to low- and middle-income countries are expected to reach US$550 billion, to become their largest source of external financing.
The global average cost of sending US$200 remained high, at around seven per cent in the first quarter of 2019, according to the World Bank’s Remittance Prices Worldwide database.
Reducing remittance costs to three per cent by 2030 is a global target under the United Nations’ Sustainable Development Goal (SDG)
“Remittances are on track to become the largest source of external financing in developing countries. The high costs of money transfers reduce the benefits of migration. Renegotiating exclusive partnerships and letting new players operate through national post offices, banks, and telecommunications companies will increase competition and lower remittance prices,” said Dilip Ratha, lead author of the World Bank report.