Remittances to Mexico Rise to Record High in May

In May, remittances to Mexico rose to their highest monthly level since records began in 1995. The total amount received amounted to US$4.514 billion, surpassing the US$4.157 billion reported in March, Mexico’s Central Bank (BANXICO) data showed on Thursday. According to the bank’s board of governors, there are two factors behind the jump in remittances in May: Mother's Day and the economic rebound driven by the reopening of the US economy.

Transactions, led by the US, likewise hit a record high and rose 15 percent year-on-year, their second month in a row of double-digit growth, totaling 12.3 million. According to BANXICO, between January and May, the monthly average of transactions amounted to 10.6 million. The average amount per remittance was US$366, 14.3 percent higher than the US$320 dollars sent in May 2020. It was, however, lower than the US$375 that were sent on average in April this year. In 2020, remittances sent to Mexico totaled US$40.61 billion, 11 percent higher than the previous year.

In an article last week, Country Manager of Bnext  Cristian Huertas wrote for Mexico Business News that although the average remittance is about US$300, “when you dig into the data you will find that the vast majority of transactions are just over US$100.” He mentioned that in most cases traditional remittance companies charge fees that can amount to as much as US$10. In light of this, he added, a wave of fintech players have been launching more competitive proposals.

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• The National Institute of Geography and Statistics (INEGI) reported this week the results of the National Occupation and Employment Survey (ENOE). The report indicates that Mexico's unemployment rate reached 4 percent in May, which means that a total of 2.3 million people are out of work. The report details that the economically active population, all people over 15 years old who work or are looking for work, amounted to 57.2 million people in May 2021. This implies a rate of 58.7 percent and represents an increase of 12 million compared to May 2020, when the health emergency confined a significant portion of the population.
   

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