In 2021, Mexico’s remittances surged 27% to USD$51.6 billion

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The money that Mexican migrants send home to their relatives grew 27.1% in 2021, totaling about $51.6 billion for the year as a whole, Mexico’s central bank said Tuesday.

That is a record amount for migrant remittances to Mexico, despite the coronavirus pandemic, and would surpass almost all other sources of the country’s foreign income, including tourism, oil exports and most manufacturing exports.

The bank said the phenomenon doesn’t appear to be tailing off. Remittances in December grew to $4.76 billion, 30.4% more than in the same month of 2020.

Remittances as a percentage of Mexico’s GDP have almost doubled over the past decade, growing from 2% of GDP in 2010 to 3.8% in 2020, according to the government. Between 2010 and 2020, the percentage of households in Mexico receiving remittances rose from 3.6% to 5.1%.

Mexico is now the third largest receiver of remittances in the world, behind only India and China, and Mexico now accounts for about 6.1% of world remittances, according to a government report.

On one hand, the spike may be simply a matter of need, caused in part by the coronavirus pandemic. Mexico’s GDP shrank 8.5% in 2020, and while the economy rebounded 5% in 2021, the last two quarters of the year showed a slight contraction, putting the country into a technical recession.

That may have led migrants to send more money to their families at home.

“When a Mexican family suffers illness or their household suffers damage, they receive more. … Why? Because, basically, they ask for help,” said Agustín Escobar, a professor at Mexico’s Center for Research and Higher Education in Social Anthropology.

Part of that growth may also have been fueled by strong labor markets and job opportunities for migrants in the United States.

In a report, Mexico’s BBVA Research said that “throughout 2021 there has been a drop in unemployment rates among Mexicans living in the United States, which improved their economic conditions and their ability to send remittances to relatives in Mexico.”

The report also noted that “the partial closing of the border between Mexico and the United States during the COVID-19 pandemic led many people who work on the U.S. side and live in Mexico to remain and live and work in the United States.”

Source: El Financiero

Mexico Daily Post