Mexico Remittances

Mexico

Mexico: Growth in remittances slows in October but overall level remains high

December 1, 2015

October represented another month of growth for Mexico’s remittances. However, the pace of expansion in transactions slowed sharply. Remittances totaled USD 2.1 billion in October, which was in line with market expectations. The result represented a 1.7% year-on-year increase and marked a notable slowdown compared to the 4.6% rise registered in the previous month.

Remittances from Mexicans abroad continue to be supported by the gradual improvement in the U.S. labor market, in particular in the construction sector. U.S payrolls in the construction sector, which is a proxy of hiring dynamics in the labor market with a high proportion of Mexican workers, jumped in November, increasing at the fastest rate since February.

The rolling 12-month sum of remittances totaled USD 24.7 billion in October, which represented a 6.4% increase over the same period last year. The increase followed the 6.9% expansion tallied in the 12 months up to September. As there is more evidence that the U.S. labor market is gradually improving, remittances are slowly approaching pre-crisis levels and the peak that occurred in 2007, when they totaled USD 26.1 billion.

Analysts who participated in this month’s LatinFocus Consensus Forecast panel continue to take these developments into account and expect remittances to reach USD 24.9 billion in 2015. For 2016, the panel sees remittances rising to USD 26.0 billion.


Author:, Senior Economist

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Mexico Remittances Chart


Mexico Remittances October 2015

Note: Year-on-year variation of remittances from Mexican workers abroad and U.S. payrolls in the construction sector.
Source: Mexico Central Bank (Banxico) and U.S. Bureau of Labor.


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