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Remittances sent to Mexico have their best February in history… but there is ‘bad’ news

Mexico captured 4 thousand 510 million dollars in remittances during February, an annual increase of 3.8 percent, adding 46 consecutive months of expansion. Its advance was the largest in four months, but analysts warned of signs of slowdown in these flows.

“The moderation of the activity profile in the United States and the high remittance base should lead to a moderation in flows to Mexico in the coming quarters,” explained Alberto Ramos, economist for Latin America at Goldman Sachs.

The data also implied its least pronounced advance since 2017according to data from the Bank of Mexico (Banxico).

In your month-to-month comparison, the amount of remittances decreased 1.4 percent, which tied two months of decline. In addition, he moved away from receiving more than five billion dollars that were reported in nine months of 2023, according to records from the Bank of Mexico.

In it first two months of the yearincome from remittances totaled 9.85 million dollars, also a historic amount, but its growth was the lowest for a similar period since 2015, with 3.4 percent annually.

With the February figure, the remittances They linked 46 months of growth in 12-month flows. The above means that from March 2023 to February 2024, the cumulative flow of remittance income It stood at 63,622 million dollars, higher than the level reached from February 2023 to January 2024, of 63,459 million dollars.


According to analysts from BBVA Mexicoremittances show signs of slowdown that must be monitored.

“Between November 2023 and February 2024, the remittances had very low increases, even with the risk of breaking the current streak of increases“, they pointed out.

This becomes relevant if one considers that from May to December 2020 these foreign exchange They increased on average 11.4 percent at an annual rate. For 2021, they had their best performance in the last 15 years, increasing 25.9 percent due to the rapid recovery of the American economy.

Behavior under the microscope

Alberto Ramos, economist for Latin America at Goldman Sachs, projected that the moderation of activity profile in the United States and the high remittance base should lead to a moderation of the flows to Mexico in the coming quarters.

Instead, Banorte analysts They highlighted that there are factors that could support the entry of these currencies into the country. For example, a favorable expectation for construction in the United Statess, which has a positive spillover into the migrant employment and a falling forecast for inflation in the remainder of the year.

“We will remain very attentive to the evolution of the electoral process in said country. So much donald trump as Joe Biden have recognized that the immigration issue It is key to your campaigns. We believe that the Trump rhetoric “It will remain aggressive, which could boost flows, as happened in 2016,” they noted.

He added that between February 2021 and February 2024 There were an average of nearly 63 thousand monthly meetings between expulsions, arrests and inadmissibility. “Thus, it is worth continuing to monitor what happens with the migration and remittances in the following months”.

Citibanamex analysts They anticipate that the remittances They will continue to grow at a lower rate than that observed in 2023, and estimate an advance of 5.8 percent in the year, from 7.6 percent the previous year.

What are the negative effects of ‘superweight’?

He added that the remittance flows provide support to the current account and private consumption, particularly for low income families who use them to consume, but the significant appreciation of the Mexican peso against the dollar weakens that use.

Gabriela Siller, director of financial economic analysis at Banco Base, indicated that in February there were 16 consecutive months accumulated in which the remittances they have lost purchasing power before the appreciation of the peso against the dollar and high inflation that prevails in Mexico.

He estimated that the amount of the remittances measured in pesos decreased 4.7 percent annually, but if we add the inflationary effect The decrease in these flows reported a decrease of 8.7 percent.

Ramos maintained that remittance flows provide support to the current account and to private consumptionparticularly for the low income families which are the main recipients of these transfers. However, he noted that “the significant appreciation of the weight is eroding the effect of remittances on consumption”.

Banorte analysts They recognized that the persistence of rising inflation in the US and Mexicoas well as the weight strengthhave limited the purchasing power of these resources.

For its part, remittances sent by residents in Mexico abroad showed an annual expansion of 37.8 percent, reaching 111 million dollars.

”With these results, Mexico’s remittance account surplus with the rest of the world was 4,399 million dollars, higher than the 4,267 million dollars that was presented in February 2023,” Banxico explained.

In the first two months of 2024, 98.7 percent of total income from remittances was done through Wire transfers, adding 8,965 million dollars. Meanwhile, those cash and kind operationsas well as the money orders They represented 1.1 and 0.2 percent of the total amount, each, the monetary organization detailed.

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