Remittances surpass US $40-billion mark; analysts’ outlook brightens for 2021. oad sent more than US $40 billion home last year, breaking the previous record for remittances by 11.4 percent. Despite the coronavirus pandemic and associated economic restrictions, Mexicans working abroad, mainly in the United States, sent $40.6 billion to Mexico in 2020, an increase of almost $4.2 billion compared to 2019 when the previous annual record of $36.44 billion was set.
Remittances increased 17.4 percent in December compared to the same month of 2019, rising to $3.66 billion, the highest level since March.
Generous economic support in the United States amid the pandemic, a “very competitive” dollar-peso exchange rate and a “deep contraction” of the economy may have acted as driving forces for Mexicans abroad to send more money home, according to Goldman Sachs’ chief Latin America economist Alberto Ramos.
He said the record remittances in 2020 would help offset tourism sector losses. Remittances, over 95 percent of which came from the United States, accounted for about 3.8 percent of GDP last year, according to calculations by economists. Money sent to Mexico from abroad was even more important last year than it is usually as the economy slumped by 8.5 percent and many people lost their jobs or saw their income fall considerably.
Analysts are forecasting a better 2021 in economic terms, even though Mexico currently faces a new peak of the coronavirus pandemic with no end in clear sight.
Thirty-six groups of Mexican and foreign analysts and economic experts consulted by the central bank are predicting, on average, growth of 3.5 percent this year, up from a 3.44 percent average response in the Bank of México’s previous survey. The consensus forecast for 2022 is 2.5 percent growth, slightly lower than the 2.6 percent previously predicted.
