The abroad – that is, the current transfers made by the workers in favor of residents of another economy – they meant 10.7 billion euros in 2023, which is equivalent to 0.7% of the gross domestic product (GDP). The result is a slight fall compared to the previous year, in tune with the cooling of global remittances. In 2022 these transfers pointed a historical maximum, representing 0.73% of GDP, data that was moderated in tune with the cooling of world remittances that year. These data are detached from an economic newsletter of the Bank of Spain, which also confirms that Latin America has been the main destination of these shipments ,. In the last decade, this region has received approximately 60% of the total payments, which is consistent with the weight of the population of Latin America in which it receives the national territory.
Of the ten main destinations of remittances, seven are Latin American countries, among which Colombia stands out, in first position. In this way, Spain has established itself as the second remittance issuing country by volume for this area ,. Payments for transfers to Latin America have shot themselves in the last decade, until reaching about 6,200 million euros in 2023. However, the impact of the pandemic has been reflected in a reduction in the amount of the average remittance, once adjusted by inflation.
Although remittances sent from Spain historically have had a modest weight in the national economy, the last two decades were marked by a remarkable dynamism. To a large extent, this was due to the mainly Latin American, between 2000 and 2007. From the beginning of the new century, the balance by remittances – the difference between income and payments for this concept – in Spain became negative, as a result of an increase in fertilizers.
The podium: Colombia, Ecuador and the Dominican Republic
Colombia occupies the first position among the main receptors of remittances from Spain in the last decade. Specifically, in 2023, one in four shipments bound for Latin America went to that country, reaching 1,500 million euros. These data, according to the Bank of Spain, coincide with the rise of the Colombian resident population over 15 years in recent years. Ecuador is the second on the region list, receiving 15% of transfers (900 million euros). They are followed by the Dominican Republic, which monopolizes 11% of shipments and is crowned as the main destination between Central American and Caribbean countries, with a volume of payments of about 700 million. Peru and Honduras also highlight, which received remittances from Spain worth around 520 million euros.
Within Latin America, South America has been the main destination, with 42% of the total remittances in 2023, although this figure has decreased from 49% noted in 2013. Instead, remittances sent to the region of Central America and the Dominican Republic (Capard) have increased their participation, from 11% in 2013 to 15% in the years after the pandemic. “Such an increase underlines the growing importance of this area as the origin of migratory flows to our country, driven by the different agreements signed with countries in the region,” the document authors highlight.
The effect of inflation
Although money shipments to different countries have grown in nominal terms proportionally more than the active population resident in Spain, the inflationary pressure has resulted in a slight fall of the monthly average gathering in real terms. Specifically, the average spiker sent to Capard, adjusted by inflation, has gone from 320 euros per capita per month in 2013 to 284 euros in 2023. For its part, the amount of payments to South America, which remained stable until 2019, has risen from the 162 euros per month per capita to 133 euros in 2023.
However, this indicator continues stable with respect to the average gain per worker, around 8%. “All this in a context in which the Latin American active population resident in Spain has moved during the last decade to sectors with higher salaries,” experts point out.
The Bank of Spain emphasizes that, for many of the recipient countries, remittances play a crucial role from the macroeconomic point of view. Shipments made from the national territory represented 15% of the remittances received in Latin America in 2023. This figure gains more weight in the cases of Paraguay (62% of the total), Bolivia (31%) and Ecuador (16%), among others. The authors emphasize that these transfers provide a vital income to meet basic needs and reduce the poverty of the homes that receive them. “In addition to having an effect on external accounts and financial stability, they act as economic stabilizers in times of crisis and encourage local economic development,” they say.
