Remittances to Latin America see Slowdown

The Latin Americanist points towards an interesting article that shows "the rate of remittances sent to Latin America has grown at a slower pace than in previous years."

A significant part of this slowdown, according to the article, is remittances to Brazil. These have slowed down for a number of reasons, including Brazil's strong economy (various aspects of which I have previously discussed), the drop of the dollar, the collapse in the housing market (and the effect that has on construction workers, some of whom are from Brazil), and the simple fact that many Brazilians are returning to Brazil because of the economy and because of anti-immigrant sentiment. I'm not sure any one of these factors is dominant - the Times did a good article late last year about Brazilians returning to Brazil after years in the U.S. And the value of the real to the dollar has radically changed (unfortunately for me), dropping from 2.25 reais to the dollar to 1.65 (and one day a couple weeks ago dropping down to 1.61) in the last 18 months alone.

I'm not an economist, and economy isn't my strong suit, so I don't know if 2007 will mark an unusual aberration, or is the start of a new trend that sees growth slow down or even stop. Simply guessing blindly, I'd suspect it's the latter, given the fact the U.S. economy is doing so poorly compared to others, among other factors. The slowdown in remittances is far from being radical - a record 66.5 billion dollars were still shipped from the U.S. to Latin America last year, but, as the Latin Americanist summarizes, the 7% growth rate is the first time it's dipped below double-digit growth recently. It will be interesting to see how this situation plays out, and what its effects will be both on the U.S. and on Latin American economies.