Tuesday, March 17, 2009

Remittances to Latin America Drop

Remittances to Latin America from the United States rose by just one percent in 2008 but will be negative in 2009 due to the recession.

The total for 2008 came to U.S. $69 billion, compared with $ 68.6 billion in 2007, said the IDB, which has been monitoring the movement of money since 2000.

In Guatemala, the effect is already evident. In February, remittances were U.S. $281.9 million, $36.8 million less than the same month in 2008.

"Remittances are a vital resource for millions of homes in the region," said Luis Alberto Moreno, IDB President, "A loss means social problems because remittances are a major source of income for thousands of families."

Moreno said that the reduction will bring difficulties for the governments of countries receiving remittances and increase pressures for social programs.

The drop expected during 2009 results from the recession in the United States, Spain and Japan, which are major sources of remittances to the region.

He said that in the United States and Spain, the construction sector which employs large numbers of immigrants and is one of the hardest sectors hit. Industrial paralysis in Japan, for its part, is directly affecting remittances to Brazil and Peru.

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