Wednesday, December 6, 2023

May remittances jump 31% over last year to US $4.5 billion

Mexicans working abroad sent US $4.51 billion home in May, a 31% increase compared to the same month of 2020, central bank data shows.

It was the 13th consecutive month that remittances – a key driver of the Mexican economy and the country’s second biggest source of foreign currency after auto exports – increased on an annual basis.

The number of transactions and the average amount of each transfer, most of which were made in the United States, both increased in May compared to a year earlier. The former figure increased 14.5% to 12.3 billion while the latter rose 14.4% to $366.

Bank of México data shows that $19.18 billion was sent to Mexico in remittances in the first five months of 2021, a 21.7% increase compared to the same period last year.

In the 12 months to the end of May, a total of $44.03 billion flowed into the country, a new record for a 12-month period. Remittances to Mexico totaled $40.6 billion in 2020, a calendar year record and an 11.4% increase compared to 2019

The United States government’s extensive support for the U.S. economy amid the coronavirus-induced downturn is cited by many analysts as the main reason for the record remittance levels.

President López Obrador on Thursday thanked migrants for sending so much money home to their families at a time when the economy is still recovering from last year’s 8.5% slump.

“Thank you, thank you, thank you, thank you very much paisanas and paisanos,” he said, referring to both Mexican women and men working abroad.

Speaking on the third anniversary of his comprehensive victory in the 2018 presidential election, López Obrador said that remittances and his government’s welfare programs staved off a consumption crisis amid the sharp pandemic-induced economic downturn.

“Thanks to remittances and the support of the welfare programs … that are applied from bottom to top, from the poorest to the peak of the population pyramid, [families] have been able to avoid a lack of food and other essential goods,” he said.

But neither remittances nor welfare programs have been able to prevent millions more Mexicans from falling into poverty. A researcher at the federal social development agency Coneval says the most recent calculations show 67 million people were living in poverty as of March, up 14.6 million since 2018, an increase that is directly related to the coronavirus pandemic.

The increase in extreme poverty has been even worse. An estimated 18.3 million people are in that category, nearly double the number in 2018.

Coneval will release final figures for last year in August.

With reports from Expansión and Milenio 

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