Mexico City – Mexico’s remittances – the money migrants send home to their relatives – have soared in the past two years, and are now forecast to top $50 billion for the first time once 2021’s figures are added up.
According to World Bank and Bank of Mexico (Banxico) data, January-November brought the tally to $46.8 billion USD. That’s already higher than the $40.61 billion received in all of 2020, and a 26.7 percent increase over the preceding 11-month period.
Banxico recorded remittances of $4.67 billion USD in November 2021 alone, an amount not observed for more than 20 years, and a 37.7% increase over the same month in 2020.
Remittances are Mexico’s largest source of foreign income but account only for 4.1 percent of its GDP, which is shored up by oil exports, tourism and manufacturing.
As a percentage of Mexico’s gross domestic product, remittances have almost doubled over the past decade, growing from 2% in 2010 to 3.8% in 2020, according to the government. Between 2010 and 2020, the percentage of households in Mexico receiving remittances grew from 3.6 percent to 5.1 percent.
The spike in remittances from the U.S. and Europe has become a common trend as workers in industrialized nations have tried to keep their families in Latin America, the Caribbean and other developing regions afloat during the pandemic, according to BBVA bank research.
Other main drivers include recovery in employment levels and fiscal and social assistance programs in hosting countries, particularly the United States.
Remittances are projected to continue to grow by 2.6 percent in 2022 in line with global macro economic forecasts. A resurgence of COVID-19 cases and reimposition of mobility restrictions poses the biggest downside risk to the outlook for global growth, employment and remittance flows to developing countries.