WASHINGTON, United States (CMC) –The World Bank Thursday said that remittance flows to Latin America and the Caribbean (LAC) surged to US$131 billion in 2021, up 25.3 per cent from the previous year.

The Washington-based financial institution said the increase was due to the strong job recovery for foreign-born workers in the United States.

It said that Haiti, with 21 per cent, was the only country to have registered double-digit growth rates while Guatemala led with 35 per cent.

“Remittances are important as a source of hard currency for several countries for which these flows represent at least 20 per cent of GDP (gross domestic product), including El Salvador, Honduras, Jamaica, and Haiti,” the World Bank said.

According to the World Bank figures, Haiti received US$4.4 billion in remittances last year, representing 20 per cent of GDP, while Jamaica received US$3.6 billion, representing 24 per cent of GDP.

Dominica, Belize and St Vincent and the Grenadines registered 10.2, 7.8 and seven percentage of GDP last year, according to the figures.

The World Bank said for this year, remittances are estimated to grow by 9.1 per cent, though downside risks remain.

It said that the average cost of sending US$200 to the region was mostly unchanged at 5.6 per cent in the fourth quarter of 2021 compared to a year earlier.

The World Bank said that officially recorded remittance flows to low- and middle-income countries (LMICs) are expected to increase by 4.2 per cent this year to reach US$630 billion and that this follows an almost record recovery of 8.6 per cent in 2021.

In its latest Migration and Development Brief released Thursday, the World Bank said remittances to Ukraine, which is the largest recipient in Europe and Central Asia, are expected to rise by over 20 per cent in 2022.

However, remittance flows to many Central Asian countries, for which the main source is Russia, will likely fall dramatically. These declines, combined with rising food, fertilizer, and oil prices, are likely to increase risks to food security and exacerbate poverty in many of these countries.

“The Russian invasion of Ukraine has triggered large-scale humanitarian, migration and refugee crises and risks for a global economy that is still dealing with the impact of the COVID pandemic,” said Michal Rutkowski, global director of the Social Protection and Jobs Global Practice at the World Bank.

“Boosting social protection programs to protect the most vulnerable, including Ukrainians and families in Central Asia, as well as those affected by the war’s economic impact, is a key priority to protect people from the threats of food insecurity and rising poverty.”

During 2021, remittance inflows saw strong gains in Latin America and the Caribbean (25.3 per cent), Sub-Saharan Africa (14.1 per cent), Europe and Central Asia (7.8 per cent), the Middle East and North Africa (7.6 per cent), and South Asia (6.9 per cent).

Remittances to East Asia and the Pacific fell by 3.3 per cent; although excluding China, remittances grew 2.5 per cent. Excluding China, remittance flows have been the largest source of external finance for LMICs since 2015.