Why did remittances to Mexico stop and what was their impact on the economy?

From April to October 2023, Sending money to Mexico The streak exceeded $5 billion (million dollars) a month, however, when Mexican households received $4,908 million in November, that streak was interrupted. Bank of Mexico (Pansico).

Banksico described in November, Mexico sent $4,908 millionAlthough this represents an annual advance of 1.9%, the index a A monthly decline of 4.7%.

According to analysts, it's only a matter of time before the U.S. economy is reflected in remittances to Mexican families. However, they pointed out that the data for a particular month does not indicate a trend and we will have to wait for the December results to fully analyze the situation.

Although November did not exceed 5 million dollars, the Mexican economy received 57,796 million dollars in the first months of 2023, in the responsibility of nationals living abroad, which represents an annual increase of 8.7% compared to the same period in 2022. .

Therefore, Mexico exceeded the 53,157 million dollars received in the first 11 months of 2022 by 4,600 million dollars. In fact, in previous months, the federal government had predicted that the $60 billion barrier would be exceeded.

Some economic analysts have pointed out that the exchange rate between the peso and the dollar has had an impact on the economy of remittance households, as they receive fewer Mexican pesos for each shipment at the time of conversion, which may explain in part. , the countrymen have increased the volume of their transfers.

According to the Banxico report, the average per capita payment between January and November last year was 394 dollars, up 1% from 390 dollars in the same period of the previous year.

The number of transactions during the same period increased by 7.7% to 146.7 million from the previous figure of 136.2 million, of which 99% were electronic transactions, he described.

The central bank highlighted that the increase in remittances in 2023 represents a major source of foreign income, continuing an upward trend since March 2020 when the Covid-19 pandemic began, with more than 40 consecutive months of year-on-year increases. Country.

On the other hand, Banxico reported that remittances worth 1,135 million dollars were sent out of Mexico in the first 11 months of 2023, an increase of 11.1% year-on-year.

In 2022, Mexico received 58,497 million dollars, a 13.4% increase compared to 2021 and the ninth consecutive year of increase.

President Andrés Manuel López Obrador has on numerous occasions expressed his gratitude to the 38 million Mexicans in the United States, from whom the majority of contributions come, and whom he considers “heroes.”

According to the President, by 2022, Mexico will become the world's second largest recipient of remittances, after India.

Remittances account for 4% of Mexico's gross domestic product (GDP), according to BBVA Bank's calculations.

According to a report by the association Signos Vitales, 7.6% of the money sent to Mexico in 2022, $4.4 billion, will come from organized crime, in a move made by Lopez Obrador to help launder money from drug trafficking. Rejected.