Remittances to Latin America Remain Strong

Remittances to Latin America are booming. According to the International Fund for Agricultural Development (a UN agency), over the past year they increased 132% and went from 19% to 23% of the global share. This includes all sending countries, but the U.S. remains the dominant sending country for the region.

This is counterintuitive given the Trump administration's immigration policies. As the report notes:

The impacts of policy changes may not appear immediately in aggregate remittance data. Migrants frequently adjust by changing jobs, increasing working hours, drawing down on savings or modifying the frequency and value of transfers. These are among the reasons that remittances can remain resilient during periods of heightened uncertainty.

The administration has been in power for just less than two years, so we may see shifts that are a delayed visible reaction to harsher policies. But remittances are very durable. Back in 2012, I noted that the global recession of 2007-2009 had slowed remittances but they bounced back. The logic could be the same now, where people chose not to leave the United States and weathered the storm. The difference now is that fewer people are entering the country, but there is already a very strong base of remittance senders who will continue to send money.