Lower job creation or job losses among compatriots living in the United States has caused the flow of remittances to our country to show signs of slowing down at the end of the first half of the year, Citibanamex announced.
According to an analysis by the financial institution, remittances to Mexico moderated their dynamism during the first half of 2024, and although they remain at historic levels by accumulating 31,343 million dollars from January to June, in terms of annual growth, less momentum was observed. In the same period of 2022, they grew at a rate of 13.4 percent; in 2023, at 9.4 percent, and in the first half of 2024, the growth rate was 3.6 percent, Citibanamex said.
“Remittance figures for the first half of 2024 point to a general slowdown in the flow of these resources to Mexico… The lower generation of jobs, in addition to the incipient increase in unemployment in the United States, are some of the factors that explain the slowdown in remittances,” the bank published.
According to the analysis, prepared by Guillermina Rodríguez, the low growth in the first half of 2024 is accentuated if we take into account the increase in inflation, both in the United States and in Mexico, as well as the volatility of the exchange rate, which are indicators that determine the purchasing power of remittances. “In real dollars – adjusted for inflation in the United States – remittances grew only 0.4 percent annually during the first half of 2024, from 4.4 percent for the same period in 2023.
In real pesos – adjusted for Mexico’s inflation and exchange rate – remittances fell 6.2 percent in the first half of the year.” He noted that remittances from California, Texas and Arizona are lower than figures observed in previous years, because even though California remains the main point of origin of this flow of resources to Mexico, its share fell from 36 percent of the total in the first half of 2023 to 33.4 percent this year.
“In the first six months of 2024, remittances from California totaled $10.85 billion, 3.8 percent less than in the same period in 2023. Likewise, Texas’ share of remittances to Mexico rose from 16.4 percent of the total in the first half of 2023 to 14.3 percent in the same period of 2024. In Arizona, the third state with the highest remittances, the proportion rose from 4 to 2.1 percent,” he explained.
In this regard, he pointed out that the increase in unemployment in some states affects the sending of remittances, since in June California reached an unemployment rate of 5.2 percent, the third highest in the United States; in Texas the rate was 4 percent, and there was only a decrease in the unemployment rate in Arizona. Citibanamex emphasized that the number of Mexican workers in the United States rose in recent months from 18.5 million to 18.2 million in July.
“These conditions would be exacerbated in the coming months by slower economic growth in the United States… For Mexico, we expect remittances in nominal dollars to grow by 4.1 percent in 2024, with volatility in some months due to exchange rate fluctuations, in an environment of global financial uncertainty, accentuated by the presidential elections in the United States,” he added.
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– 2024-08-23 05:41:59
