Increase in Remittances in August: An Economic Breather for Mexico
11:06 02/10/2024 - PesoMXN.com
The remittances coming to Mexico saw a notable increase in August. During that month, $6,087.3 million was received, which represents a 9.3% annual growth and an 8.4% increase compared to July. In total, from January to August, remittances reached $43,027.3 million, with a 3.7% increase.
In August, the average remittance sent was $407, according to the Bank of Mexico (Banxico). According to BBVA Research, significant fluctuations in the exchange rate of the peso against the dollar impact the decisions of Mexicans living abroad. "Uncertain whether exchange rate fluctuations are permanent or temporary, many take the opportunity to increase their dollar remittances to get more value in pesos when they are cashed in Mexico," they noted. During August, the peso faced a depreciation of 5.4%, leading analysts to expect a noticeable uptick in remittances. Additionally, the number of transactions, particularly from the United States, rose by 8.2%, nearing 15 million. The growth of remittances has been a driving force for consumption in recent years, although experts expressed concern that this momentum could weaken in the future due to a potential slowdown in the U.S. economy.
It’s interesting to note how remittances act as a lifeline for many families in Mexico, not only due to the influx of capital but also because of their impact on consumption. However, since these remittances can be affected by the U.S. economy and exchange rate fluctuations, it is crucial for recipients to consider diversifying their income sources and financially planning to strengthen their long-term economic stability.
