The Dominican Republic received US$10.3 billion in remittances in 2022 and ranked third among the main recipient countries of these flows in Latin America and the Caribbean, only surpassed by Guatemala and Mexico, according to data provided in the latest World Bank report on digital connectivity and its impact on the inclusion and development of societies.
The flow of remittances sent by workers abroad has increased since 2000, particularly in the Caribbean, Mexico and Central America, according to the organization in the report “Connected: Digital Technologies for Inclusion and Growth”.
In 2022, the region made up of Latin America and the Caribbean received 146 billion dollars in remittances, a phenomenon caused by the recovery of foreign employment in the United States as of January 2020, one of the factors for this rebound in the last two years.
In this period, the region became one of the main recipients of these flows worldwide and was only surpassed by South Asia among emerging markets, according to the report.
Latin America and the Caribbean also became the region where remittance flows grew the fastest in the last 10 years, making them a key financial resource for its countries.
Percentage of GDP
In the case of the Dominican Republic, the value of remittances received in 2022 amounted to US$10.3 billion, which represented 7% of the total received by the region in the same period and made up 9% of the country’s Gross Domestic Product (GDP).
The country was behind Guatemala, which received 18.1 billion dollars (12.4%), and Mexico, which with 61.1 billion dollars (41.9%) was the largest recipient of remittances in the region and ranked second in the world, only surpassed by India.
Despite the growth and importance of remittances in the region, the World Bank is concerned about the percentage that remittances represent within the GDP of the recipient countries, whose median is 19.1% in Central America and 6.4% in the Caribbean.
The reticence of the organization in this regard is due to the importance of remittances in poor households and the volatility of these flows, especially during global upheavals that impact both receiving and sending countries, such as the paralysis suffered during the COVID-19 pandemic.
In the Dominican Republic, remittances represent 40 percent of income in impoverished households, while the share of these flows in national income is 9 percent as of September 2022, according to World Bank data.
According to the World Bank, the percentage represented by remittances in many countries, such as Honduras (26.8), El Salvador (23.7), Haiti (22.4) Jamaica (21.6), Nicaragua (20.6) and Guatemala (19.1) exceeds 10 percent of their country, which raises questions regarding the competitiveness of other sectors.
In the case of Mexico, the largest recipient of remittances, the item represents 4.3 percent of its national income.
According to the report, the region carried out appropriate macroeconomic reforms over the last three decades, which provided greater resilience in the face of crises such as inflationary pressures, uncertainty stemming from the war in Ukraine, low commodity prices and growing debt in the post-pandemic phase.
Poverty and employment have generally returned to pre-crisis levels, and inflation, excluding Argentina and Venezuela, has fallen to a regional average of 4.4%, below OECD countries, the agency added in the document published in early October.
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