Remittances in June contract for the first time in three years, showing a decrease of 0.7%, although during the first half of 2019 they amounted to 16,846 million dollars, +3.7%.
In 2018, 1.65 million households in Mexico received remittances, 4.7% of the total. 27% of remittances receiving households are in the two lowest-income deciles and 12.7% are in the two highest-income deciles.
Remittances-receiving households have a very similar consumption pattern to the national average. 36.0% of expenditure was spent on food, beverages and tobacco; 18.6% on transport and communication and 10.8% on education and leisure, primarily.
In Zacatecas, 18.2% of households received remittances, 14.8% in Nayarit, 13.3% in Michoacán and 13.2% in Guerrero.
The states of Michoacán (1,672 md), Jalisco (1,643 md) and Guanajuato (1,523 md) received the most remittances in the first half of 2019, while Tijuana and Puebla were the municipalities with the highest income from this resource.
Remittances contract for the first time in more than three years, ending streak of 38 consecutive months.
The Bank of Mexico reported that in June 2019, Mexico received $3,119 million for family remittances. As anticipated in BBVA's estimates, the first contraction of this monetary flow in more than three years occurred, with a decrease of 0.7% compared to June last year. The previous contraction in remittances occurred in March 2016, when a 2.8% drop was recorded. Thus, a 38-month consecutive streak of growth in remittances has come to an end.
This contraction in the latest remittance data does not mean a negative trend in this flow; rather it is explained by a base effect, since in June 2018 atypical growth of 23.1% was observed. The level of economic activity and the unemployment rate in the United States, where much of the Mexican diaspora resides, remain at very favorable levels, which also drives remittances to Mexico.
In June 2019, 9.3 million transactions were recorded for sending remittances to Mexico (+1.6%), with an average amount of US$336 (-2.0%). By the first half of 2019, remittances amount to $16,846 million, an increase of 3.7% over the same half of the previous year, although 2.2% less than the amount recorded in the second half of 2018.
SOURCE: FX Street
