Remittances Keep Flowing InBy Peter Appleby | Mon, 01/04/2021 - 18:37
The generosity of Mexican migrants and their central importance to the Mexican economy was reflected in the 15.6 percent growth in remittances registered in November 2020 against the same month in 2019 despite the ongoing pandemic.
Remittances reached US$3.381 billion in November according to Banxico figures, even though the COVID-19 crisis has kept some economic activities in major US migrant states including California and Texas restricted.
November’s figures mark a reduction against the US$3.598 billion sent in October and a reversal in the steady increase in remittances that have been sent to Mexico since April. Still, they show a significant increase over last year’s amounts. Electronic transfers were the primary method for sending remittances back to Mexico with over US$3.353 billion sent electronically. Remittance inflows for 2020 have now reached a total of US$36.945 billion, the highest figure since records began in 1995. In 2019, some US$33.319 billion were sent back to Mexico between January and November, while the year ended with just over US$36.438 billion arriving to Mexico, Banxico reports.
Mexicans remains the world’s largest international migrant group with the vast majority of Mexican migrants – 96.1 percent according to the Mexican government – heading to the US. The reliance on remittances for many families in Mexico remains acute, particularly in states with the highest rate of migrant populations like Michoacan, Nayarit and Oaxaca.
The growing levels of remittances, including the record-breaking US$4.044 billion sent in April, have surprised analysts who originally expected reduced numbers as the suffering US economy saw millions of job losses.
That drop-off has not come and while this is welcome, it also appears to underline the increased need for remittances in Mexico. The country’s economy continues to struggle to restart following unforgiving and reinstated lockdowns, even in the capital, during the usually busy festive period. However, news like a 26-year high in agricultural trade surplus Mexico have buffered some economic blows.
The Director General of Western Union Mexico Pablo Porro told MBN in September that other countries within Central America were witnessing this same growing trend in remittances during the pandemic. “Remittances have effectively proven to be recession proof,” he said. However, due to the unprecedented nature of the financial and economic crisis, authorities and the company would continue to monitor the inflow situation.