Background on Juan José Li Ng and His Relevance
Juan José Li Ng is a senior economist at BBVA, a global financial group with operations in over 30 countries. His expertise lies in migration and remittances, making his analysis crucial for understanding the economic impact of migrant workers’ financial contributions to Mexico.
Current Economic Situation in the US
The economic situation in the United States plays a significant role in determining the flow of remittances to Mexico. Despite changes in migration policies during President Trump’s first term, remittances grew by 50% due to robust economic performance.
Remittances Trends and Economic Factors
From 2020 to 2024, remittances to Mexico increased annually: 8% in 2020, 20% in 2021, 12% in 2022, and 10% in 2023. However, the volume of Mexican migrants only grew modestly from 11.5 million to approximately 12.5 million during the same period.
- The significant growth in remittances reached a limit as migration did not increase proportionally, unlike the situation in Central America.
- During this time, labor shortages in the US likely attracted Mexican migrants for dual employment.
- Economic incentives boosted employment, but recent policy shifts have negatively affected remittances.
BBVA’s Projections and Their Implications
According to Li Ng, if the current migration and economic policies in the US persist, remittances to Mexico could fall to 3.3% of its GDP by the end of 2025 from 4.3% in recent years.
- This decline would mean a reduction from $64.746 billion in 2023 to around $48.512 billion by the end of 2025.
- He anticipates that remittances will likely remain around this level for the next two years, possibly dropping to 3.1% of Mexico’s GDP in 2026 and 2027.
Migrant Workers’ Concerns and Their Impact
Li Ng emphasizes that migrant workers’ fear of strict migration policies limits their ability to work and spend, directly affecting their capacity to send money home.
Key Questions and Answers
- What is the current situation with remittances to Mexico? Remittances have grown significantly from $40,000 billion in 2020 to over $60,000 billion in 2024. However, this growth is not supported by proportionate migration increases.
- What factors influence remittances to Mexico? The economic situation and migration policies in the US are crucial. Even with policy changes during Trump’s first term, remittances grew due to a robust US economy.
- What are BBVA’s projections for remittances to Mexico? If current US migration and economic policies continue, remittances could fall to 3.3% of Mexico’s GDP by the end of 2025, down from 4.3%.
- How do migrant workers’ concerns affect remittances? Fear of strict migration policies discourages migrant workers from working and spending, limiting their ability to send money home.
