Remittances hit a new record high of $33 billion in 2018.
Increase attributed to US President Trump’s stance on illegal immigration and a strong economy
The fear of deportation fed by United States President Donald Trump’s hardline rhetoric on immigration and a strong U.S. labor market and economy drove remittances from Mexicans outside the country to an all-time high in 2018.
Mexicans working abroad, mainly in the United States, sent US $33.48 billion to Mexico last year, an increase of 10.5% over the 2017 figure, according to the Bank of México (Banxico).
The remittances were sent in 103.9 million separate transactions, a 6% increase on the 2017 figure, and each one was on average $322 compared to $309 the year before, Banxico data shows.
Almost 98% of remittances were sent by electronic means and just over 94% came from the United States.
The total dollar amount sent to Mexico made remittances the country’s second largest foreign currency earner after auto exports, which totaled around $142 billion.
Just seven states received half of all remittances sent.
Michoacán took in just under $3.4 billion followed by Jalisco, with almost $3.3 billion; Guanajuato, with just over $3 billion; México state, with $1.9 billion; Oaxaca, with $1.7 billion; Puebla, with $1.7 billion; and Guerrero, with $1.6 billion.
Financial analysts say that Trump’s tough stance on illegal immigration has encouraged Mexicans in the United States to send more money home.
The Mexican government estimates that around 12 million Mexicans live in the United States and about half that number are there illegally.
Analysts at the Mexican bank Banorte say they expect the flow of remittances from the United States to remain strong in 2019 because the fundamentals of the U.S. economy are strong.
Migrants from Latin America and the Caribbean are sending more money to their families back home than ever before.
These annual “remittances” — as they’re called by analysts — topped $69 billion in 2016, according to central bank data compiled in a new report by the Inter-American Dialogue, a Washington, D.C.-based think-tank. The money has been a lifeline for the national economies of many countries in the region since at least the 1990s, when Manuel Orozco, a political scientist who authored the report, first began tracking remittances. They climbed steadily since then, only to plummet when the Great Recession hit the U.S. economy in 2008. But they began to rise again in 2012. The 2016 tally is the highest amount on record and an increase of nearly 8 percent over 2015.
About 40 percent of the money goes to just one country — Mexico — practically all of it sent by migrants in the United States. The recent surge is all the more notable because migration from Mexico has slowed to a crawl — with the number of migrants in the U.S. increasing by just 1 percent between 2010 and 2016 to a total of 11.8 million. Also, says Orozco, the median amount that any given Mexican migrant sends hasn’t changed — about $300 at a go, 14 times a year, most commonly through a money transfer company such as Western Union.
So what accounts for this surge in cash to Mexico? Orozco explains that a much larger share of Mexicans already in the United States are now wiring money back. In 2010 fewer than half of Mexican migrants sent money home. Today two-thirds do.
Orozco can’t be sure why. Though he regularly does large-scale surveys of Mexican migrants, “I haven’t asked that question,” he notes.
A possible explanation, he says, is that many Mexican migrants who would have gone back to Mexico are now staying put in the United States. His survey research indicates that from 2011 to 2016, the median length of time a Mexican migrant has lived in the United States increased from seven years to 12. Some migrants are deterred by rising violence back in their hometowns, says Orozco.