Remittances broke a record in February and linked 46 months of growth

Mexico City. Remittances continue to rise compared to last year, when they reached a record level. In February 2024, 4.51 billion dollars in family transfers entered Mexico, an increase of 3.75 percent compared to what was registered in the same period of 2023, when these resources ended with an unprecedented balance. However, due to the appreciation of the peso and inflation, the value of these resources fell 8.8 percent.

In February, remittances accumulated a streak of 46 consecutive months of annual increases, highlighted the BBVA analysis area; however, they show signs of slowing downhe warned.

The Ministry of Finance and Public Credit also predicts that this flow of resources will decrease because in the United States the support granted during the pandemic is running out and less dynamism is expected in its labor market.

Between May and December 2020, remittances to the country increased on average 11.4 percent at an annual rate, due in part to the fiscal stimulus packages and direct transfers to households in the United States, including nearly 7 million Mexican migrants with citizenship or permanent residence in that countryBBVA explained in an analysis. Therefore, the growth of 3.75 reflects a slowdown.

BBVA recalled that in 2021 remittances had their best performance in 15 years: they grew 25.9 percent due to the rapid recovery of the US economy, which covered its need for labor with both documented and undocumented migrants.

This condition boosted the flow of Mexican migrants in that year and in subsequent years, which contributed to an increase of 12.1 percent in remittances in 2022 and an average growth of 8.9 percent between January and October 2023. But between November 2023 and February 2024, remittances had very low increases and the streak of increases was at risk of breaking, he highlighted.

In the accumulated period from January to February, an annual reduction in these inflows into the Mexican economy has not yet been observed. Remittances reached 9.84 million dollars, 3.44 percent more than what was registered last year.

The Mexican government estimates that in 2024 a significant amount of remittances will still be received, but less compared to last year – when they rose to 63.32 billion dollars – due to the exhaustion of support to alleviate the pandemic in the United States. and a less dynamic labor market.

A significant flow of remittances from abroad is estimated, although at a more moderate pace, mainly due to the exhaustion of government support in the United States, the smaller excess of private savings and a less dynamic labor market than that observed in 2023, the year in which recorded low unemployment rates and high salaries for Mexican and Mexican workers in the United Statesexposes the dependence on the 2025 Pre-Criteria.

This year there are elections in the United States. Before the 2016 elections, the flow of remittances increased 8.88 percent, due in part to anti-immigrant discourse.