Mexico Remittances September 2015


Mexico: Weak peso boosts remittances in September

October 3, 2016

Remittances from workers abroad soared in September, following two timid expansions in July and August. Transactions totaled USD 2.4 billion in September, which marked a 15.7% increase over the same month last year (August: +0.7% year-on-year). The increase brought the 12-month trailing sum of remittances to USD 26.2 billion, which represented a healthy 6.2% year-on-year expansion. This followed the 5.3% increase in the 12 months up to August.

The ongoing improvement in the U.S. labor market continues to support the upward trend in remittances, but September’s increase, which is clearly well above the growth trend, suggests that Mexican workers abroad are taking advantage of the weakness of the peso. Remittances thus currently look to be being boosted artificially by the peso depreciation and workers’ opportunistic behavior. Analysts suggest that, since the acceleration in remittances is not being driven by real income effects, but rather by the aforementioned factors, growth in remittances is expected to slow in the coming months.

Analysts who participated in this month’s LatinFocus Consensus Forecast panel expect remittances to reach USD 26.5 billion in 2016. For 2017, the panel sees remittances rising to USD 27.2 billion.

Author:, Senior Economist

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Mexico Remittances Chart

Mexico Remittances September 2016

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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