The impulse of remittances to Peru: growth and projections for 2024

The remittance market to Peru has experienced a significant boost at the beginning of 2024, largely driven by the rise of the dollar and the strength of the US currency. During the past year, money transfer revenues reached US$4.446 billion, with the United States being the main country from which these remittances originate, representing 46% of the total. According to experts such as Mario Guerrero from Scotiabank, the increasing trend in remittance sending has been ongoing throughout 2023 and has continued in the first quarter of 2024. This increase is attributed not only to the growing number of Peruvians working abroad but also to the strong labor situation in the United States and Spain, the main sending countries. The price of the dollar plays a crucial role in remittance sending, as when the currency strengthens, beneficiaries in Peru receive a greater amount of soles for each dollar sent. This situation benefits migrants abroad to send more money to their families to help them cope with the rising cost of living in the country. A growth in the remittance market in Peru is projected for this year, estimating a 10% increase compared to previous years. The seasonality of this market is reflected in months where the volume of remittances increases, such as during the school year, end-of-year holidays, and other important celebrations. Despite representing only 1.6% of the GDP, remittances continue to be an important income flow for the country. It is expected that the behavior of remittances in Peru will be above the global average in 2024, thanks to the increasing number of Peruvians abroad and the advancement in digital transactions in this sector. In a context where the dollar is strengthening and labor conditions abroad are favorable, the remittance market in Peru is solid and constantly growing, providing significant economic support to recipient families and contributing to the country's development.