November, one of the months with the most drops in sending remittances to Mexico

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A couple of days ago, the Bank of Mexico (Banxico) released the data on remittances that arrived in Mexico during November 2023, which showed a decrease compared to those registered in October.

When reviewing the data from the central bank, in the penultimate month of the year there is usually a lower sending of remittances at a monthly rate.

In November of last year, Mexico received 4,908 million dollars for remittances, an amount 4.7% lower than the 5,812 million that the country received in October.

One of the reasons why the sending of dollars to Mexico decreases has to do with the fact that the countrymen who work in the United States save to send a greater amount in December, so that their relatives can face the end-of-year expenses, explained Montserrat Aldave, principal economist at Casa de Bolsa Finamex; and Rodolfo Ostolaza, deputy director of economic studies at Citibanamex.

In November of last year, shipments also decreased, 12.7 million transactions, and the average sent, 386 dollars, compared to the 14.6 million operations in October and the 397 dollars sent on average, according to Banxico figures.

When reviewing the last years, only in 2016 was the amount of November higher than that of October.

From 2017 to 2022, the total remittances that Mexico receives went from 33,000 to 58,500 million dollars, underlined the Citibanamex executive.

Another fact to highlight has to do with the fact that in times of crisis, such as the covid-19 pandemic, the countrymen who work in the United States make a greater effort to send money to Mexico, added Montserrat Aldave.

During the pandemic, the US government offered economic aid to the population of that country, so people did not stop having money, in addition to the fact that sectors such as home delivery and food continued to operate, added the Finamex director.

Another of the reasons why in November of last year there was a reduction in remittances, says Ostolaza of Citibanamex, has to do with the number of Mexicans with employment in the United States.

“In October there were 18 million 743,000, and in November the number fell to 18 million 363,000, about 380,000 fewer workers between one month and another, the biggest drop since April 2020, when 2.9 million jobs were lost. of Mexicans in the United States ”, he said.

The appreciation of the peso against the dollar -superpeso- and the rebound in inflation are aspects that play against Mexicans who live south of the Rio Grande and receive remittances.

“Remittances contracted even more, both in pesos and in real terms,” said Aldave, from Finamex.

The analysts consulted agreed to point out that Mexico will close 2023 with an accumulated amount of remittances exceeding 60,000 million dollars.

In this regard, President Andrés Manuel López Obrador has said at the morning conference that the figure will be around 63,000 million dollars.

Although the recession that the market expected for the United States during 2023 did not occur, for this year a technical recession is expected, which could have a negative impact on remittances.

Especially if a slower pace of the US economy affects sectors such as construction, in which around 33% of Mexicans work, as well as delivery services, food; In addition, jobs related to health care, education and domestic service, although the latter no longer plays such a relevant role for Mexicans, the interviewees specified.

Good news for Mexicans who work in the United States is that more than 50% have high school or university studies.

“We can no longer think of the classic field worker who earns the minimum wage and works in precarious conditions,” Ostolaza said.

November and January are the months when the currencies sent by Mexicans living abroad contract the most.

Source; Expansion