Spain to outstrip US in Andean remittances

Everyone in the remittance business knows that US-Latin America corridor is slowing down, with growth in single digits for the first time in 7 years. The Inter-American Development Bank estimates that Spain, also a larger sender of remittances to Latin America, will soon outstrip the US as the largest sender in the Andean belt. This is already the case in some countries such as Bolivia and Ecuador. This is despite the fact that Spain is also expected to experience an economic slowdown, with growth estimates for GDP at 2.3% in 2008 and 2009, down from 3.8% in 2007. The reasons for the expected change are first, the strength of the Euro and second, the cultural affinity between Spain and Latin America making the former a more hospitable environment for migrants. Spain is a net sender of remittances with $1 billion sent out in just January.

Developing Markets Associates CEO Leon Isaacs comments, “I think it would take a long time for Spain to overtake USA – just think about the size of the Mexico corridor. However, they are growing faster in Spain than the US and of course there is a foreign exchange earning from Spain that is not present from the US. Many companies are looking at Spain and many have moved there already. If they have not thought about it by now then they certainly should – that is if theyare not too late!”