Family Remittances Sustain Nicaragua’s Economy

Western Union office. File photo

By La Prensa

HAVANA TIMES – Through August of this year, overall remittances to Nicaragua totaled 1.381 billion dollars. Of these, 866.1 million came from the United States, an amount that provides significant support to the Nicaraguan economy, according to data from the Central Bank of Nicaragua.

The amount received through August of this year is 16.5 percent greater compared to the same period in 2020 ($1.186 billion).

Most of Nicaragua’s remittances from other countries are also growing, but only the United States reports an increase of 22 percent.

Last year, through August, 709.5 million dollars came from the United States, where the largest migrant community of Nicaraguans is. This year the amount thus far is 156 million dollars more sent from the United States. The remittances stimulate domestic consumption and, consequently, the growth of the economy which this year the Central Bank of Nicaragua estimates at 7 percent, based on the activity incurred in 2020.

In August alone 174.8 million dollars arrived from the United States, greater than the same month last year. But it was in March that the highest amount for 2021 was reached at 190.7 million dollars.

Nicaraguans have benefitted from the United State’s economic recovery after being hard hit in 2020 by the impact of the pandemic. However, the spread of covid’s delta variant has created a kind of pessimism among US economists who have already cut expansion projections for this year.

In an update to its forecasts, the National Association of Business Economists downgraded their growth forecasts from an estimated 6.7 percent in to 5.6 percent in 2021.  But they increased the prediction for 2022, which went from an initial 2.8 percent to 3.5 percent.

Another country with significant growth in remittances sent to Nicaragua is Spain, with 203.6 million dollars sent through August of this year, greater than the 169.8 million dollars for the same period last year. This represents an increase of 33.8 million additional dollars, or 19.9 percent growth.

In third place are Nicaraguans in Costa Rica, sending 175.5 million dollars, slightly less than 179.1 million last year at this time. The Costa Rican economy has been greatly affected by the pandemic, which has led to an increase in unemployment.

The community of Nicaraguan emigrants living in Panama has sent 47.1 million dollars through August, greater than the 46.6 million dollars sent in the same period last year.

Other countries where remittances are sent from are: Canada with 19.7 million dollars, Mexico, 4 million dollars, El Salvador, 8.3 million dollars, and from the rest of the world, 57.3 million dollars, according to official figures.

Read more from Nicaragua here on Havana Times.