Remittances to Mexico are expected to reach a historic high of 64,247 million dollars by the end of 2023, according to a report by the Inter-American Development Bank. Despite this new high, the value of these remittances in pesos will be lower compared to last year due to the exchange rate and inflation. The organization projects a 9.8 percent increase in family transfers to Mexico in 2023, but the appreciation of the peso against the dollar will cause its value in Mexican currency to drop by 3.4 percent.
Even with the drop in value, the estimated 64,247 million dollars in remittances to Mexico represents 3.9 percent of the gross domestic product (GDP). However, this growth rate is 41 percent lower than the estimated growth rate of Mexico’s GDP per capita, indicating a relative deterioration in the income of Mexican families that receive remittances compared to those that do not benefit from these flows.
In the region, Mexico continues to be the main recipient of remittances in Latin America and the Caribbean, with remittance flows to Mexico expected to represent 41.2 percent of all transfers to the region in 2023. The vast majority of remittances to Mexico come from the United States (96 percent), with a smaller percentage coming from Canada and the rest of the world.
The report also notes a decrease in Mexican migrants in the United States, but explains that migratory flows do not have an immediate effect on remittances, as migrants need to settle and find work before they can start sending money.
Overall, remittance flows to Latin America and the Caribbean are expected to reach 156 billion dollars during 2023, marking an unprecedented figure and adding 15 consecutive years of growth, with significant growth seen in Central American countries, Mexico, and South America.