Remittances to Mexico up 15.6% in June to $5.15 billion

by Anthony Harrup

MEXICO CITY– Remittances in Mexico exceeded $5 billion for the second straight month in June as senders increased the average amount of money they transferred home.

The Bank of Mexico said on Monday that Mexicans abroad made $5.15 billion in June, 15.6% more than the year-ago month and just shy of a record $5.17 billion in May. In the first half of the year, remittances totaled $27.6 billion, an increase of 16.6% compared to the first half of 2021.

The average amount of each transfer in June was $408, the second largest amount on record.

Taking into account the increase in the cost of living in the US, which is the source of 95% of remittances to Mexico, “this suggests that migrants are able to adjust their consumption baskets as a result of changes in prices, leaving them at least The lows are partially affected by the “commodities that have seen the greatest growth,” analysts at Grupo Financiero Banorte said in a note.

UK-based money-transfer company WorldRemit said an online survey conducted among remittance senders in countries including the US showed that inflation is having an impact on both senders and recipients.

“Migrants around the world actively conserve daily spending to maintain their ability to send loved ones home to support them,” WorldRemit said.

Nearly half of the respondents in the June survey said they were eating less to save for day-to-day expenses, while three-quarters said recipients were also feeling the pinch of higher prices, leaving many people scrambling for expenses. Encouraged to send more money home. WorldRemit said that in the form of health care, education and monthly bills.

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Inflation in Mexico is above 8%, its highest level in more than 21 years.

Banorte expects remittances to Mexico to reach a record $56.5 billion this year, but sees risks in economic weakness in the US, where GDP contracted in the first and second quarters.

Banorte said an increase in US initial jobless claims in recent months suggests a recession in the labor market has begun. “This situation could also affect Mexican immigrants to the US, and eventually, remittances,” Benoert said.

Write to Anthony Harrup at [email protected]

(END) Dow Jones Newswires

Aug 01, 2022 14:59 ET (18:59 GMT)

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