Remittances from the United States have increased nearly 61% since 2018 as Spain displaced Costa Rica


Since the outbreak of the social and political crisis in April 2018 until now, Nicaragua maintains a growth trend in terms of income received from remittances sent by Nicaraguans who have emigrated. In the past four years, a larger share of shipments from Spain has been noteworthy and in terms of the methods used to mobilize funds, banks are now dominated more than specialized agencies.

Between January and September 2021, remittances in Nicaragua totaled $1,557.3 million, compared to $1,342.7 million received in the same period in 2020, according to data from the Central Bank of Nicaragua (BCN).

In other words, shipments received by citizens residing abroad, who migrated in search of job opportunities and better living conditions, increased this year by 15.9 percent compared to 2020.

Also read: $866.1 million in transfers from the United States to support the economy

In the same way, the backlog up to September 2021 is still higher than what was reflected at the same time in 2018 (1097.4 million). Historically, remittances have been primarily driven by money from the United States, Spain, Costa Rica, and Panama. The other participating countries are Canada, Mexico and El Salvador.

For example, in 2020, total transfers amounted to $1851.4 million. Of this total, only $1111.2 million are shipments from the United States, 271.5 million are shipments from Spain and $131.5 million are from Costa Rica. In other words, 80 percent of remittance flows come from these three countries.

The behavior of shipments in recent years

Remittances were necessary to reduce poverty and maintain consumption. Between 2018 and 2020, even in 2021, remittances did not stop growing and were key to avoiding the collapse of the economy with increased unemployment and poverty in the last three years of recession.

reference image. Archive / Press

Between January and September 2018, remittances from the North American country to Nicaragua totaled $609.9 million and now, in the same period in 2021, it was $980.9 million, which translates as an increase of 60.8 percent.

It should be noted that only in the third quarter of this year, the figure reached 336.2 million.

Spain, for its part, removed Costa Rica from second place. Until September 2018, $121.9 million from the European country arrived in the country, while in the same months of the current year, the figure rose to $227.2 million, i.e. a significant growth equivalent to 86.3 percent was reported.

Meanwhile, the data also indicates that a total of $74.4 million was sent between July and September 2021.

It might interest you: Conversions keep growing. These are the main countries I grew up in

Secondly, Its neighbor to the south, Costa Rica, ranks third as the main source of remittances from Nicaragua. Specifically, the country went from raising $213.6 million through September 2018 to receiving $196.2 million in the same period in 2021. The drop equates to 8.1 percent.

Data from the highest banking source indicates that in the first nine months of this year, such shipments totaled 64.7 million.

Nicaragua was favored by the recovery of the economy of these countries, after 2020, which was hit hard by the impact of the COVID-19 pandemic.

In case Panama, It also reflects a decrease in remittances. BCN statistics reveal that as of September 2018, $56.3 million entered Nicaragua from the Canal State, then in the same period in 2019, this number increased and reached 64.7 million.

Archive / Press

But in the reference period for 2020, revenue fell to $52.3 million, and the figure is currently around $52.4 million.

On the other hand, only in the third quarter of 2021 remittances from Panama were 17.0 million.

Other countries from which remittances come are: Canada with $8.1 million, El Salvador with $3.4 million, and Mexico with $1.5 million, according to official figures.

Shipping methods and beneficiary departments

With regard to shipping methods, BCN data shows what was obtained in the third quarter of 2018 ($ 372.8 million), specialized agencies received $ 156.0 million, commercial banks received $ 186.9 million, and remittances from pockets are estimated at $ 29.9 million.

Read also: Spain ranks second among the countries of origin of remittances received by Nicaragua and the displacement of Costa Rica

On the other hand, of the $527.1 million that entered the country in the third quarter of 2021 from remittances, $342.7 million was through commercial banks. $181.1 million came through specialized agencies, and the rest was in pocket transfers.

Of the total incoming remittances in this period, 71.6 percent were concentrated in 6 provinces of the country, with Managua being the main recipient, with 29.7 percent of the total incoming remittances.

“Other departments that emerged as the recipients of remittances are: Chinandiga (10.5 per cent), Matagalpa (9.2 per cent), Esteli (8.4 per cent), Leon (7.3 per cent) and Nueva Segovia (6.4 per cent),” the report said.

Big increase in immigration

Sociologist Cirillo Otero explained that remittances benefit families receiving these resources and that remittances reflect an increase, specifically, due to the mass migration observed in recent months.

Read also: Remittances reach $671.2 million until April of this year and indicate a growth of nearly 23%

But the cost of living in Nicaragua has gone up in the past four months, and it’s very high. For example, the basket of goods and services from 53 products is more than 17,000 Córdoba”.

The reason, residents recommend saving. “Take these pennies and invest them in the most necessary things. Let us remember that in the first three months of 2022 there will be important expenses, for example, children’s schooling. In addition, we will not have enough food because we are already entering a dry period. “

Following this line, he noted, “2022 will not be easy, the whole panorama is gray because there is no increase in production, the Renacer’s law is in the fore and the political and social struggle with the dictatorship is still dangerous.” lamented.

On November 10, US President Joe Biden signed and passed a law to strengthen Nicaragua’s adherence to the terms of electoral reform or the Renacer Act, which proposes putting more pressure on the Ortega and Murillo regime, through individual sanctions against officials and the restriction of multilateral bank loans.

Might interest you: BCN estimates CAD 12,247 million in Christmas bonus, plus increase in transfers and credits

On the other hand, Otero estimates that by the end of 2021, nearly $2 billion in family transfers will arrive. “With economists we have calculated that if the same last year is repeated and the increase continues, it will reach $2,100 million.”

The Central Bank of Nicaragua (BCN) estimated on Wednesday that between November and December, a total of $382 million would be recorded in remittances, compared to 343.2 million received in the same period in 2020.

Regionally, Nicaragua ranks fifth as a recipient of remittances, and Guatemala was the first country with a total of $4042.2 million.

Leave a Reply

Your email address will not be published. Required fields are marked *