In accord with the continued economic struggles, the World Bank indicated that worldwide remittance funding is expected to see a 7 to 10 percent drop in 2009.
Remittances, which are funds transferred from foreign workers to their home countries, are expected to fall to $304 billion in 2009, down from $328 billion in 2008. The anticipated drop in remittances is a result of heightenedunemployment in migrant-destination countries and continued worldwide economic woes.
In Latin American countries, the decrease in remittances is expected to be between 6.9 to 9.4 percent. Latin America is predicted to receive $58 to 60 million in remittances this year, as compared to approximately $64.5 million in 2008.
The primary reason for the decrease in remittances in Latin America stems from a slowdown in the construction industry in the United States as many Latin American workers are employed in the U.S. construction sector.
“The remittances are a life preserver for many poor countries,” said Dilip Ratha, an economist at the World Bank.
“Although they have shown some resistance to the crisis, including only a small decrease of 7 to 10 percent, it could mean significant hardships for some cities and governments.”
Costa Rica, whose first recorded remittance payments were in 1977, saw remittances of $635 million in 2008.
According to the World Bank, remittances account for 2.4 percent of the gross domestic product (GDP) of Costa Rica.
In other Latin American countries,remittances account for far more significant portions of the economy and GDP. In Honduras, for example, the $2.8 billion in remittances make up 21.5 percent of GDP. Guatemala, which takes in the most remittance funding in Central America, saw $4.45 billion in 2008.
India, China and Mexico receive the most remittances worldwide.