Remittances spin six months above 5,000 million dollars and the monthly flow accelerates

Families receiving remittances registered income of 5.360 million dollars in October, a flow that meant an annual increase of 11.2%, reveals information from Banco de México (Banxico).

With this entry, six consecutive months of a monthly flow of more than 5,000 million dollars were spun; shipments regained strength after two months of deceleration and became the highest monthly income since records were recorded, 1985, breaking the record reached in June 2022. Four months ago, displaced workers sent 5,301 million to their homes in Mexico of dollars.

The recovery shown by remittances in October is the result of the competitiveness of the exchange rate, which the issuers perceived for the performance of their support -compared to that of a year ago- and also the result of the intention of workers abroad to help to their families when the economy in their country of origin is contracted or with employment difficulties, explained the economist for Latin America at Goldman Sachs, Alberto Ramos.

The information from the central bank shows that between January and October 2022, the accumulated amount of income from remittances amounted to 48,338 million dollars, a flow that exceeded by 14.6% the entry observed in the same period last year, when workers Mexicans sent 42.172 million dollars to Mexico.

The Goldman Sachs economist calculated that remittances grew by 8.7% annually in local currency and real terms. During October, the Mexican peso appreciated 2.3% against the dollar, which led to a slowdown in the performance of remittances.

Low average remittance, increase transfers

In the information detailed by Banxico, it can be seen that in October, the average remittance received by each of the 4.9 million beneficiary households amounted to 385 dollars.

This average transfer received by the beneficiary families shows a moderation with respect to that received in September, which was 395 dollars, threaded a fourth monthly slowdown and remains below the peak reached last June, when each recipient household entered 407 dollars.

The director of economic analysis at Banco Base, Gabriela Siller, explained that the growth in the flow of remittances results from the increase in the number of operations through which they arrived in Mexico.

The information shows that 13.916 million transactions were registered in October, a new record high compared to any month.

In the period January-October of this year, 99% of the income from remittances was registered through electronic transfers; that is, 47.850 million dollars. Information from the central bank shows that remittances in cash and kind continue to arrive, as well as money orders, which represented 0.7 and 0.3% of the total amount.

It is not an achievement of the Mexican economy

In mid-November, President Andrés Manuel López Obrador said that with their remittances, migrants “are pulling us out of the hole” in economic matters. He pointed out that no source of financing in Mexico is as important as these shipments and estimated that they could reach 60 billion dollars by the end of the year.

The Banco Base economist stressed in an analysis that “the sustained growth of remittances is not an achievement of the Mexican economy since it is about transfers of value generated abroad, mainly in the United States.”

Deputy Governor Jonathan Heath explained in his personal twitter account that the flow of remittances as of October reached 57.751 million dollars. “Given this figure, we will hardly reach 59,000 million dollars by the end of the year.”

The economist for Mexico at the Organization for Economic Cooperation and Development, Alberto González Pandiella, recently explained that remittances have been very important in supporting consumption in Mexico.

ymorales@eleconomista.com.mx