Background on Remittances and Their Importance
Remittances, or the funds sent by migrant workers to their families in Mexico, play a crucial role in the Mexican economy. These financial transfers serve as a vital source of income for many households, contributing significantly to the country’s GDP. In May 2023, families in Mexico received $5,360 million in remittances, marking a 4.6% annual decrease.
Expert Insights: Alberto Ramos of Goldman Sachs
Alberto Ramos, an economist specializing in Latin America at Goldman Sachs, explains that the typical surge in remittances during special occasions, such as Mother’s Day, did not offset the impact of stricter U.S. migration and anti-money laundering policies.
Risks to Future Remittances
Ramos highlights two key risks to future remittances: the evolution of the U.S. labor market and wages for low-skilled workers, coupled with tightened migration policies and anti-money laundering measures.
Remittance Statistics in May 2023
According to Banco de México (Banxico), 4.1 million families received an average of $385 per transfer in May. It’s important to note that some households may receive remittances from multiple family members.
Transfer Operations in May 2023
Banxico’s data indicates that there were 13.9 million remittance operations in May, the highest monthly number observed from January to May. Although the total value of remittances decreased compared to the previous four months, it was still more than in May 2022 when there were 14.7 million transfers.
Key Questions and Answers
- What are remittances? Remittances are financial transfers sent by migrant workers to their families in their home countries, such as Mexico.
- Why are remittances important to the Mexican economy? Remittances contribute significantly to the Mexican GDP and serve as a vital source of income for many households.
- What factors led to the decrease in remittances in May 2023? Stricter U.S. migration and anti-money laundering policies, along with the evolving U.S. labor market and wages for low-skilled workers, contributed to the decrease.
- How many remittance operations were there in May 2023? There were 13.9 million remittance operations in May 2023, the highest monthly number observed from January to May.
