Mexico: Remittances continue to decline in September
November 2, 2010
Remittances from workers abroad reached USD 1.71 billion, which was down 1.6% over the same month last year. The figure undershot market expectations, which had anticipated remittances would amount to USD 1.87 billion. Remittances are intimately related to developments in the U.S. economy, in particular in the construction sector, and are thus expected to recover only modestly in the months ahead, as the U.S. economy is losing steam. In fact, remittances are still far from pre-crisis levels, with the 12-month trailing sum sitting at USD 20.9 billion in September, well below the peak of USD 26.1 billion recorded in December 2007. Remittances still represent Mexico's second most important source of foreign revenue - after oil exports - as well as an important source of income for many Mexican families. Consequently, the weak recovery in remittances does not bode well for a strong rebound of private consumption going forward.