Latam | Remittances to Argentina, Peru and Colombia

Summary

Remittances are a key source of foreign currency in Latin American countries, although tighter migration policies in the United States will moderate their growth and their share of GDP. The effects will be limited in Argentina and more noticeable in Colombia and Peru, with a more gradual expansion path.

Key points

• Key points:
• In terms of GDP, remittances account for 0.2% in Argentina, 1.7% in Peru, and 2.8% in Colombia, compared with 3.5% in Mexico.
• The countries included in the study show diversified sources of remittances by origin. The United States accounts for 27% of total remittances to Argentina, 42% to Peru, and 53% to Colombia—well below Mexico’s 97%.
• The diaspora in the United States amounts to 1.2 million Argentines, 1.7 million Peruvians, and 3.7 million Colombians, far below the 11.6 million Mexicans. Most arrived before 2010, more than half are homeowners, and they display higher labor force participation and employment rates than in their countries of origin, reflecting strong integration.
• A simulation combining migrant growth, economic activity in the United States, and a migration policy factor shows heterogeneous effects: the new migration policy does not reverse flows, but it slows remittance growth and tends to moderate their relative weight in GDP.
• Cumulative growth in total remittances of 13% in Colombia and 5.2% in Peru is projected for 2025–2026. Weakness in remittances from the United States is partially offset by other destinations; their share of GDP stabilizes or declines slightly. In Argentina, the effect is marginal: remittances—already low—are projected to grow 7.5% cumulatively over 2025–2026.

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