Robert W. Meins Remittances Specialist, Multilateral Investment Fund (MIF) Inter-American...

Robert W. MeinsRemittances Specialist, Multilateral Investment Fund (MIF)Inter-American Development Bank (IDB)

2007: $ 66.52007: $ 66.52008: $ 67.5 2008: $ 67.5 (est.)(est.)

+ 1.5 %+ 1.5 %

2007: $ 66.52007: $ 66.52008: $ 67.5 2008: $ 67.5 (est.)(est.)

+ 1.5 %+ 1.5 %

1) Economic situation

2) Immigration climate

3) Exchange rates

4) Inflation

Source: US Census (CPS)

Source: US Census (CPS)

Source: World Bank

Source: New York Times

Source: European Central Bank

Period of rise in remittances from EuropeRapid appreciation of the dollar

Source: Orozco 2007

Source: Orozco 2007

• Remittance data continues to improve, but is not yet perfect

• Remittances are a family obligation, not driven by profit motives

• LAC remittances likely to rise +/- 1.5 % in nominal terms• Crisis-related dollar appreciation will increase remittances

in local currency terms in countries with free floating currencies.

• $67.5 billion will be received by Latin American families in 2008.

• 80% spent on consumption 20% on savings and investment.

• Remittance receipts remain a largely unused source of liquidity

Economic situation: Further economic slowdown affecting industries important to migrant workers

Migration climate: Negative immigration climate in broader range of sending countries. Continuing rise in Hispanic unemployment.

Exchange rates: Depreciation of the Euro

Inflation: Sustained rise in food/fuel costs

• Remittances have been and will continue to be relatively stable financial flows

• Relative importance of intraregional remittances likely to increase.

• Once the global economy begins to recover, so will remittance growth

Robert W. MeinsRobert W. MeinsRemittances Specialist+1 (202) 623 1325Rmeins@iadb.org