Remittances to Colombia continue to grow: over USD $6 billion entered the country between January and July

August 27, 2024

Remittances to Colombia reached significant figures in the last 7 months. This increase in international transactions positively impacted the country’s economy and consolidated remittances as a key additional income for Colombian households.

remittances to Colombia, dollars, sending money from abroad, Más Colombia

Remittances to Colombia soared in recent months. According to Banco de la República, transactions entering Colombia from abroad increased significantly in the first 7 months of the year with respect to 2023.

Figures from the Bank confirm that during the first seven months of the year, Colombia exceeded US$6,628.50 million in remittances, which translates into a 1.6% increase compared to remittances received during the same period in 2023.

Remittances to Colombia totaling US$1,006.4 million were received in July alone, an increase of 32% over the previous year. This is the second highest amount since 2000 and the second highest so far this year, following closely behind June, when US$1,017.2 million in remittances were received.

According to Banco de Bogotá, this increase in remittances to Colombia is a consequence of “the improvement in the economic activity of remittance sending countries and the increase in the outflow of Colombians”.

#GráficaDelDíaBdB 💸 La entrada de remesas registró un avance anual de 32% en julio al totalizar en USD1,006 M, el segundo nivel más alto desde el 2000, a raíz de la mejora en la actividad económica de los países de donde provienen las remesas y la mayor salida de colombianos. pic.twitter.com/91SinjcGiw
— Investigaciones BdB🥈🥈🥈🥉 (@IEBancodeBogota) August 26, 2024

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Colombian migration increases, remittances to Colombia rise

The increase in Colombians migrating abroad and better economic conditions in countries such as the United States and some European countries have contributed to the increase in remittances this year.

According to estimates by Banco de Bogotá’s research group, around 1.2 million Colombians migrated between 2021 and 2023, a time when the world economy grew by an average of 4.3% after having suffered a 2.8% drop in 2020.

migration, travel, remittances to Colombia, Más Colombia

During this period, the United States implemented less stringent immigration policies, which allowed Colombians in the United States to enjoy better economic conditions and, therefore, to send more remittances to their families in Colombia.

This increase in remittances to Colombia had a positive impact on recipient households in the country. According to the Banco de Bogotá report, in recent months, remittances have become an important source of income for households.

In addition, remittances to Colombia also helped to keep the exchange rate stable and placed remittances as the second largest generator of money flows in dollars, after oil (US$15.6 billion) and even above coal (US$9.2 billion).

Cifra del día:

📊Entre enero y julio de 2024, 🇨🇴 recibió US$6.633 millones en remesas, un 17,7% más que en el mismo periodo de 2023.

🔎Solo en julio, ingresaron US$1.006 millones, un crecimiento del 32,1% respecto a julio del año pasado. pic.twitter.com/kSxeoMfJrP
— MinHacienda (@MinHacienda) August 26, 2024

remittances, remittances to colombia, money, Más Colombia

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The weight of remittances in the Colombian economy

According to data from the entity’s economic team, the proportion of remittances in relation to Colombia’s GDP increased from 1.1% in 2014 to 2.8% in 2023, the highest figure in this century.

Despite the increase in remittances to Colombia in recent months, the receipt of these economic transactions from abroad remains well below other Latin American countries.

In Central American and Caribbean countries, remittances have become a key economic driver. In Jamaica, Haiti, Honduras and El Salvador, the receipt of remittances can represent between 20% and 23% of GDP.

Thus, although remittances have acquired great importance for Colombian households, becoming a vastly important additional source of income, their role in the national economy remains small.

Reports from Banco de Bogotá highlight the potential of remittances in the country’s economy and foresee a sustained increase in the receipt of these international remittances.