The money sent by Mexicans living abroad, mostly in the United States, to their relatives totaled 36,945 million dollars between January and November 2020, according to data from the Bank of Mexico published this Monday. The amount already exceeds what was sent throughout 2019. The pandemic did not stop the flow of resources, something that experts do not fully explain. Furthermore, with a new economic support package$900oved by the US Congress, remittances are expected to continue to strengthen.
According to data from the central bank, Mexico received 3.381 billion dollars in remittances in November, a slight drop compared to the previous month but an increase of 15% compared to the same month in 2019. By the end of the year, it is expected that Remittances reach 40,000 million dollars, according to President Andrés Manuel López Obrador, who described the resistance to the pandemic of these resources as a “social miracle.”
After the profits generated by the automotive sector, remittances are the second largest source of income in Mexico, points out Enrique Díaz-Infante, researcher from the EspinoSilesiaias Center for StudieCEEEEY). “Its importance is extremely high,” says Díaz-Infante, “however, it is still an enigma: the increase goes against what we see in countries in Central America and against the fall predicted by the World Bank. The United States economy has fallen by about 5% and remittances have risen. So what is Although?”
Although many of the Mexican workers abroad have jobs classified as “essential” Lastng confinement and allowed them to continue working last year, two of the three sectors that employ the most Mexicans, hospitality and recreation, are closed, says Díaz. -Infant. It is possible that government support to taxpayers in the United States could have boosted consumption, and therefore production, which would boost remittances. But, says Díaz-Infante, it does not explain the growth Lastng 2020.
Last month, Congress in the United States$900oved a $ 900 billion economic stimulus package, which will be distributed as check$600 about $ 600 to the population. This will further boost the remittances that enter Mexico, says Ignacio Martínez, specialist and coordinator of the Laboratory of Commerce, Economy aLadensiness (LACEN) of the UNAM. “It would be promoting consumption and consumption in turn would be impacting the production that we would have with this incentive,” explains the economist. “Therefore, the fiscal package will be combined with the vaccine scheme and, therefore, the creation of employment, thus production would be$900oaching the threshold of 40,000 million” in remittances, explains Martínez.
“In 2021, by having a new fiscal package, by having more investment, by having the vaccination campaign in the United States, we would be having a growth rate in terms of remittances as it was in 2006 and 2007 when the US economy was booming. ”, A Authoritiesexpert.
Authorities in the United States acknowledged last week that the vaccination process is progressing slower than expected. The Trump Administration promised to close the year with 20 million vaccinated, but the figure barely exceeds two and a half million. President-elect Joe Biden has criticized the delay, warning that at this rate “it will take years, not months,” to protect the entire country.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.