Martes 4 de Junio 2024

Remittances Recover

After a 3.4% drop in March, remittances grew by 8.3% in April. Due to inflation and the appreciation of the peso against the dollar, in April 2024, households in Mexico received 4.1% less in remittances compared to April 2023.

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With 5.422 billion dollars received, the month of April saw family remittances to Mexico rebound by 8.3% compared to the same month of the previous year, according to data from the Bank of Mexico.

This figure also represents a recovery compared to March of this year when remittances fell by 3.4%, ending a streak of 46 consecutive months of increases since May 2020.

In April 2024, 13.5 million remittance transactions were recorded, equivalent to a 2.8% annual increase, while the average remittance was 403 dollars.

Despite this significant increase in remittances in dollars, the appreciation of the exchange rate (Mexican pesos vs. U.S. dollars) and inflation have reduced the flow of these resources to Mexico. In real terms, households in Mexico received 4.1% less in remittances compared to April 2023, according to a BBVA Research document.

Leyenda: Image taken from BBVA Report.

The document also reports that Latino employment in the United States is currently 10% above the pre-pandemic level (from 28.3 to 31.2 million jobs), while non-Latino employment is stagnant at levels observed before the pandemic (130.3 million jobs).

The United States is the main destination country for Mexican migration and, therefore, also for the remittances we receive. It is estimated that 96.3% of the remittances that arrive in Mexico come from our northern neighbor.

For this reason, it is important to monitor the economic activity and employment level in the United States, which not only impacts the employment of the Mexican migrant population in that country and the remittances that arrive in Mexico but also many countries in the Latin American and Caribbean region.

Compared to the pre-pandemic situation, all employment growth in the United States over the past four years has been for the population self-identified as Hispanic or Latino, which largely explains the significant increase in remittance flows to many Latin American and Caribbean countries, including Mexico, of course.