Background on the Importance of Remittances in Mexico
Remittances play a crucial role in the Mexican economy, serving as a vital source of income for millions of families. These financial transfers from Mexicans living abroad, primarily in the United States, significantly contribute to the country’s GDP and help alleviate poverty. In recent years, remittances have consistently surpassed foreign direct investment (FDI) as the primary source of external financing for Mexico.
Recent Trends in Remittances
In November, Mexican households received a record-breaking $5,125 million in remittances, according to data collected by Mexico’s central bank, Banco de México. This marks the seventh consecutive month of monthly remittance inflows exceeding $5,000 million since May 2023.
Annual Comparison and Decline
Despite the November inflow, when comparing it annually to the remittances received by these 4.4 million families in November of the previous year, there is a noticeable decline of 5.7%. This annual comparison has shown negative trends for nine months in 2022, compared to the historical dynamism observed in remittances during 2021.
- February: -3.2%
- April: -4.1%
- May: -2.8%
- June: -16.2% (deepest decline)
- July: -5.4%
- August: -6.3%
- September: -4.9%
- October: -5.2%
- November: -5.7%
Cumulative Remittances in 2023
According to Banco de México’s figures, in the 11 months reported so far in 2023, remittances have totaled $56,469 million. This cumulative flow is 5.1% lower than the $59,523 million recorded in the same period of 2024.
Key Questions and Answers
- What are remittances? Remittances are financial transfers sent by migrant workers to their families in their home countries, in this case, Mexico.
- Why are remittances important for Mexico? Remittances contribute significantly to the Mexican economy, providing a vital source of income for millions of families and helping to alleviate poverty.
- What recent trends have been observed in Mexican remittances? Since May 2023, monthly remittance inflows have consistently exceeded $5,000 million. However, there has been an annual decline of 5.7% when compared to November 2022.
- What is the cumulative remittance situation in 2023 compared to 2024? In the first eleven months of 2023, Mexico has received $56,469 million in remittances, which is 5.1% lower than the $59,523 million recorded during the same period in 2024.
