Record-breaking remittances: Mexico expects US$63.7 billion inflow in 2023

According to a recent study by BBVA México, remittances to México are projected to increase by 8.9% in 2023, reaching a historic high of approximately US$63.7 billion.

This outlook surpasses previous forecasts that predicted flows of around US$62.6 billion for the year.

In the first half of 2023, remittances to the nation reached US$30.238 billion, marking a 9.9% increase compared to the same period in 2022.

This continuous rise has been observed monthly since 2019.

By the end of 2022, the inflow of remittances had amounted to US$58.51 billion, indicating a 13.4% year-on-year growth from 2021.

Additionally, BBVA México, in conjunction with the National Population Council (Conapo), predicts that by 2024, remittances could climb to US$67.9 billion, which is 6.6% higher than the estimates for the end of 2023.

BBVA México’s chief economist, Carlos Serrano, highlighted that the predicted remittance growth rates are marginally lower than in past years.

This decline is due to an anticipated gradual deceleration in the U.S. job market, which represents the origin of 95% of every dollar sent to México.

Serrano emphasized the increasing reliance on remittances in specific Mexican regions, where they have become a main source of foreign exchange, surpassing direct foreign investment, crude oil exports, and international tourism.

Michoacán, Chiapas, Oaxaca, and Zacatecas have the highest dependency on remittances, in contrast to Campeche, Tabasco, and Nuevo León.

He also clarified that many remittances originate from legitimate sources, responding to international media reports suggesting potential money laundering through these channels.

He further highlighted that remittances now constitute 4.1% of México’s GDP.

Globally, remittances witnessed a 68% growth between 2010 and 2022.

However, in México’s case, there was a whopping 175% surge in this timeframe, showing a consistent upward trend since 2016, with expectations of continued growth.