WASHINGTON – The severe recession in the United States will cause remittances to Latin America and the Caribbean to fall by at least 6.9 percent this year, the World Bank said Monday.

Having earlier predicted a 5 percent decline in remittances worldwide, the bank revised the forecast in accord with its view, stated last month, that the global economy will shrink 2.9 percent in 2009.

The World Bank now says that in the best case, remittances to developing nations will slip by 7.3 percent from last year’s total of $328 billion, and that they could plunge by as much as 10.1 percent.

For Latin American and the Caribbean, which received $64 billion in 2008, the bank forecasts a decline in the range of 6.9 percent to 9.4 percent.

The weakness in the U.S. labor market, especially in the heavily immigrant-dependent construction sector, has already prompted a fall in the amount of money sent home by Latin American and Caribbean expats.

Remittances to the region this year are likely to total between $58 billion and $60 billion, according to estimates by the lead economist in the Development Prospects Group of the World Bank, Dilip Ratha.

Mexico – No. 3 last year worldwide in remittances last year with $26.3 billion – has already experienced a 11 percent drop in 2009.

The Dominican Republic has seen remittances fall 7 percent year to date compared with the same period in 2008, while Guatemala has received 10 percent less and Honduras, 8 percent.

The World Bank says Latin America and the Caribbean could see an upturn in remittances as early as next year, albeit a modest one of around 1 percent.

But if the global slump drags on for longer than expected, remittances to the region could drop another 2 percent in 2010, the bank said. EFE