Remittances to Mexico fell 20% in September compared with last year
MEXICO CITY -- Remittances to Mexico from abroad fell by more than 20% in September compared with the same month in 2011, according to Mexico’s central bank, a decline that experts said can be partly explained by the reduction in immigrant employment in the United States.
Nearly 11% of all Mexicans live abroad, most of them in the U.S., and the money they send home to family members is one of the country’s most important sources of foreign income, representing about 2% of the country’s gross domestic product.
Mexico's remittances for September stood at $1.66 billion, according to the Bank of Mexico, compared with $2.08 billion in September 2011, a drop of 20.2%.
Researchers at Mexican bank BBVA Bancomer had been expecting the steep fall. They said an "extraordinarily high” amount of money was sent back to Mexico in September 2011, thanks to a steep increase in the exchange rate at the time. (The exchange rate can be a major factor on remittances because immigrants often wait for the rate to be as favorable as possible before sending money home.)
But the BBVA experts, citing U.S. Bureau of Labor Statistics figures, also pointed to the labor market in the United States, where the number of Mexican immigrants in the workforce has dropped from more than 7 million in January to fewer than 6.7 million in August. The reasons for that decline are unclear, but they could be tied to the summertime contraction in the U.S. manufacturing industry.
Yearly Mexican remittance figures have been inching up after taking a plunge in the recession: The total amount of remittances in 2011 was $22.7 billion, a 7% rise over 2010.
Thus far, total remittances in 2012 amount to about $17.2 billion, according to the Mexican central bank.
-- Richard Fausset