WASHINGTON, United States — The World Bank says remittance growth in Latin America and the Caribbean (LAC) slowed to 7.7 per cent in 2023 reaching US$156 billion, supported by a strong US labour market.

However, despite slow growth, remittance flows still increased most to the LAC region followed by South Asia (5.2 per cent), and East Asia and Pacific (4.8 per cent, excluding China). Sub-Saharan Africa saw a slight decline of 0.3 per cent while the Middle East and North Africa experienced a nearly 15 per cent drop, and Europe and Central Asia saw a 10.3 per cent fall.

This is according to the World Bank’s latest Migration and Development Brief released on Wednesday, June 26.

Lead economist and lead author of the report, Dilip Ratha shared that, “the resilience of remittances underscores their importance for millions of people.”

“Leveraging remittances for financial inclusion and capital market access can enhance the development prospects of recipient countries. The World Bank aims to reduce remittance costs and facilitate formal flows by mitigating political and commercial risks to promote private investment in this sector,” Ratha continued.

The report said Mexico received US$66.2 billion, a 7.8 per cent increase maintaining its position as the top recipient in the region.

Looking ahead, it predicted that flows to LAC should grow at a faster rate of 2.7 per cent in 2024 but noted potential downside risks to these projections to include weaker than expected economic growth in high-income migrant-hosting countries and volatility in oil prices and currency exchange rates.

Meanwhile, the report noted that sending remittances remains too costly.

It said in the fourth quarter of 2023, the global average cost of sending US$200 was 6.4 per cent of the amount being sent, slightly up from 6.2 per cent a year earlier and well above the Sustainable Development Goals (SDG) target of three per cent.

It said digital remittances had a lower cost of five per cent, compared with seven per cent for non-digital methods, highlighting the benefits of technological advancements in reducing the financial burden on migrants.

For the LAC region, the cost of sending US$200 averaged 5.9 per cent, largely unchanged from the previous year.