Remittances sent to Mexico from abroad declined in March compared to the same month of 2023, but the total for the first quarter of the year was still above the amount received in the same period 12 months earlier.

Remittances — the vast majority of which are sent from the United States — totaled US $5.02 billion in March, a 3.3% decline compared to the same month last year, the Bank of Mexico (Banxico) reported Thursday.

It was the first time since April 2020 that incoming remittances fell compared to the same month of the previous year. The previous year-over-year-decline coincided with the onset of the COVID-19 pandemic.

Banxico also reported that remittances totaled $14.1 billion between January and March, a 1% increase compared to the first quarter of 2023. Remittances last year totaled $63.31 billion, the highest level on record.

Although monetary transfers from abroad fell in March, the total for the month was higher than the amounts received in each of January and February.

The 1% year-over-year growth in remittances between January and March was the weakest first quarter result since early 2013.

Banxico said that the average remittance in the first quarter of 2024 was $385, an increase of $3 compared to the same period of last year. Almost 99% of the money that flowed into Mexico in remittances was transferred electronically.

Remittances are extremely important for the Mexican economy, but their purchasing power here has been eroded by the strength of the peso — which was trading at just under 17 to the dollar at midday Thursday — and inflation.

To compensate for the stronger peso, there is evidence that some migrants have increased the amounts they send in dollars.

The vast majority of remittances are sent by hard-working, honest Mexicans who are often described as “heroes” by President Andrés Manuel López Obrador.

However, the think tank Signos Vitales said in a report last year that around 7.5% of the more than US $58 billion in remittances sent to Mexico in 2022 could be linked to drug trafficking.

With reports from El Economista, Reuters and El Universal