Remittances to Mexico declined almost 10% in July compared to the previous month, according to the Bank of Mexico (Banxico).
However, the incoming total for the first seven months of 2024 is nearly 3% above the amount received in the same period of 2023, which was a record-breaking year for remittances to Mexico.
Banxico reported Monday that US $5.61 billion in remittances flowed into Mexico in July, a 1% decline compared to the same month of 2023 and a 9.6% drop compared to June.
Despite the year-over-year and month-over-month declines, the remittances total last month was the second-highest sum ever for the month of July.
Gabriela Siller, director of economic analysis at Banco Base, attributed the declines to “the deterioration of the labor market in the United States.”
The vast majority of remittances to Mexico come from the United States, where millions of Mexicans live and work.
In the first seven months of 2024, remittances totaled US $36.94 billion, a 2.9% increase compared to the same period of last year.
Mexicans abroad sent a record-breaking US $63.31 billion home last year.
In early 2024, the strength of the Mexican peso diminished the purchasing power of remittances sent to Mexico’s families. However, the peso has depreciated considerably against the US dollar since the June 2 elections in Mexico, increasing the value of dollar transfers when converted to pesos.
🟣Mexico receives a historic amount of remittances, $6.213 billion, with an annual increase of 11.3% (June 2024). Of these, 96% come from the United States. 💸The majority of those receiving remittances live in low-income households.
➡️ https://t.co/0B16CNl8Qx pic.twitter.com/DzsVP1wfdN— México, ¿cómo vamos? (@MexicoComoVamos) September 2, 2024
More than 6 million Mexicans depend on remittances to make ends meet, according to the bank BBVA. Their value has increased significantly in recent years, rising almost 70% between 2019 and 2023.
BBVA is forecasting that Mexico will receive US $66.5 billion in remittances this year, a figure that would represent 3.7% of the country’s GDP. Mexico is the world’s second-largest recipient of remittances after India.
The think tank Signos Vitales said in a 2023 report that there was evidence that around 7.5% of the more than US $58 billion in remittances sent to Mexico in 2022 could be linked to drug trafficking.
During his sixth and final report to the nation in Mexico City on Sunday, President Andrés Manuel López Obrador said that the money that Mexicans abroad send to their relatives “has become the main source of income for our country,” although export revenue was almost 10 times higher in 2023.
He often describes Mexican migrants who send money home as “heroes.”
Remittance data in detail
- In the first seven months of the year, 99% of the money sent to Mexico in remittances was transferred electronically. The remaining 1% was sent in cash or via money orders.
- The $5.61 billion sent to Mexico in July was transferred in 14 million transactions. The average amount of a single remittance was $402, 4% lower than the record high of $419 in June.
- A total of $796 million was sent out of Mexico in remittances in the first seven months of the year, a 31.7% increase compared to the same period of 2023.
With reports from El Financiero, Reforma and El País
