Remittances cushioned Covid hit and boosted recovery for Latin America
Remittances are an important source of income for families in Central America and the Caribbean, funding more than 20% of total household consumption in several countries. During 2020, Latin America and the Caribbean was the only region to enjoy an increase in workers’ remittances.
What you will learn:
- We forecast remittances to Latin America and the Caribbean will reach a new record high in 2021, after a bumper year in 2020.
- Strong remittances helped cushion the impact of severe lockdowns and the absence of tourism revenues during the peak of the pandemic, topping up household incomes in countries where fiscal support was fainthearted.
- We see remittance growth moderating as economic conditions in home countries improve and the region becomes less dependent on transfers to keep the economy alive.
Why we’re more pessimistic on LatAm growth than the IMF
Our growth outlook for Latin America is lower than the IMF's forecasts, published today. A key area of difference is our views on US prospects. We expect the US to enter a mild technical recession soon and other advanced economies to cool significantly due to their higher-for-longer monetary policies.Find Out More
After the post-pandemic slump, a steady climb back for Latin America
We expect Latin America's six largest countries' combined GDP to expand 0.8% next year, down from our 1.8% forecast for 2023 and the consensus' 1.4%. The dissipation of idiosyncratic shocks and less restrictive domestic policies should support a broad regional recovery in 2024 from the recessions LatAm's major economies are in or about to enter.Find Out More