Remittances to Mexico in August Reached Another Record Level
Remittances to Mexico in August reached another astonishing amount for the month of August, surpassing the annual peak.
Mexico received $5,563 million in remittances in August, a never-before-seen figure for that month. Furthermore, remittances to Mexico in August saw an 8.6% increase, the highest in the past three months.
However, when valued in pesos, these flows experienced a 12.5% decline in real terms and marked ten consecutive months of decline due to the strength of the Mexican currency.
With the August data, there have been six months with remittances exceeding five billion dollars, with four of those months surpassing $5.5 billion.
The cumulative figures for January through August also reported a historical high, totaling $41,459 million, a 9.3% increase compared to the same period the previous year, according to records from the Bank of Mexico (Banxico).
While it is a new historical record in terms of amount, it represents the slowest growth since the same period in 2020.
Remittances to Mexico in August
Remittances to Mexico in August reveal some economically significant details. In the last 12 months, they also reached unprecedented levels, totaling $62,028 million.
In fact, they now account for 70.8% of the total received in 2022.
According to BBVA, the remittance flows to Mexico should translate into a higher standard of living for households.
However, due to inflation and the appreciation of the peso, Mexican households received 12.6% less than in August 2022.
The Central Bank added that remittances sent by residents in Mexico to other countries in the reference month registered a year-on-year increase of 17.3%, reaching $104 million.
“99% of the total remittance income was made through electronic transfers, totaling $41,022 million.
Remittances in cash and kind and money orders represented 0.8% and 0.2% of the total amount,” it emphasized.
An analysis by BBVA Research estimated that remittances will continue to expand due to the strong labor demand in the United States. Therefore, it appears that remittances to Mexico will continue to rise.
Analysts from Grupo Financiero Banorte reiterated that the data was positive in a context where employment indicators for migrants showed a slight deterioration.
Only the unemployment rate for Mexican workers living abroad increased to 5.1% from 4.3% in the reference month.
Finally, Banco Base noted that based on the published remittance figures for Mexico in August, it estimates that the accumulated flow in 2023 will be $63,229 million, with an annual growth rate of 8.1%.
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