Remittances to Mexico will reach 64,247 million dollars at the end of 2023, a new historical maximum in line with the upward trend they have shown, but their value in pesos will have fallen compared to last year, both due to the exchange rate and due to inflation, reported the Inter-American Development Bank (IDB).
A study by the organization projects that in 2023 family transfers to Mexico, known as remittances, will grow 9.8 percent compared to 58.51 billion dollars last year. However, the appreciation of the peso against the dollar will cause its value in the Mexican currency to fall 3.4 percent, and once the effect of inflation is taken, it will drop 9.1 percent.
Even with the drop in its value, the 64,247 million dollars that Mexico will receive in remittances throughout 2023, according to IDB estimates, will represent 3.9 percent as a proportion of the gross domestic product (GDP).
The growth rate of remittances is 41 percent lower than the estimated growth rate of Mexico’s GDP per capita in the year, which shows a relative deterioration in the income of Mexican families that received remittances compared to those that did not benefit. of these flowsaccording to the report.
In the regional comparison, Mexico remains the main recipient of remittances in Latin America and the Caribbean, while its share continues to grow. Flows to the country during 2023 will represent 41.2 percent of all transfers to the region, a proportion that in 2013 was 37.54 percent.
The remittances that Mexico receives come from the United States (96 percent) and 1.8 percent from Canada, since the vast majority of Mexican emigrants live in these countries. The rest is distributed in the rest of the world, with a relatively high participation of Ecuador, Spain and the United Kingdom.
According to the Census Bureau’s Current Population Survey, until August 2023 there has been a decrease in Mexican migrants in the United States. Nevertheless,
Migratory flows do not have an immediate effect on remittances, since migrants need to settle and find work before they can start sending money.explained the IDB.
On a regional scale, the flows of remittances received by the countries of Latin America and the Caribbean are expected to reach 156 billion dollars during 2023, 9.5 percent more than last year, which will reach an unprecedented figure and add 15 consecutive years of growth.
The progress is produced above all by the growth in remittances received by Central American countries (13.2 percent), particularly Nicaragua; Mexico (9.8 percent) and South America (7.9 percent), especially in Argentina and Paraguay, explained the IDB.