In 2011, remittances reached $1.053 billion according to the IDB, accounting for 18% of GDP, 20% coming from Costa Rica, and the rest mainly from the U.S.
The figure comes from a study entitled ‘Remittances South-South - The Importance of the Costa Rica-Nicaragua Corridor’, by the Multilateral Investment Fund of the Inter-American Development Bank (MIF-IDB).
A website will allow senders to compare the costs of their remittances from the U.S. to Central America, encouraging competition between providers of such services.
The Center for Latin American Monetary Studies (CEMLA), the Multilateral Investment Fund (MIF), a member of the Interamerican Development Bank (IDB) and World Bank today (Thursday 2 February) launched enviacentroamerica.org, a free online tool that can be used to compare and make transparent the costs of remittances from the United States to six Central American countries and the Dominican Republic.
During the first four months of this year, the country reported the largest decrease in the volume of remittances in all of Central America.
According to a report from the Inter-American Development Bank, after 10 years of continuous growth, the interannual variation of remittances between the months of January and April showed a drop of 10%.
Reporter Patricia Palma writes in Elsalvador.com: “This decline is fundamentally explained by rising unemployment in the United States which, unlike what happened in the crisis in 2001, is affecting practically all sectors and states within the country. At that time, the economic recession was ‘avoided’ by the immigrants thanks to their flexibility in skills and geography; however, the current circumstances have caused a smaller margin to maneuver because all sectors that rely on heavy labor have reported big drop-offs in demand.”
The Academy of Central America heads a group of companies and institutions seeking to promote the use of banking services in this sector.
With funding from the Inter-American Development Bank (IDB) and the Office of Technical Cooperation of Spain, the project seeks to combat poverty in this immigrant sector, for which it is implementing different methods, including lower remittance costs, by intensifying the use of banking services such as savings accounts.
The economic crisis in the US, combined with inflation and the value of the quetzal, is affecting a million homes that living off remittances.
Up to 27 September, the Bank of Guatemala reported that income from family remittances was $3.2 billion, an increase of only 6.4% in comparison to the same period in 2007 when the total was $3.05 billion at an increase of 14.2%; in 2006 remittance grew by 23%.