Mexico is expected to receive a record-breaking $64.247 billion in remittances by the end of 2023, according to the Inter-American Development Bank. This represents a 9.8% increase from the previous year, but due to the appreciation of the peso against the dollar, its value in Mexican currency will drop 3.4%, and even more after accounting for inflation.
Despite this decrease in value, these remittances will still make up 3.9% of Mexico’s GDP. However, this growth rate is 41% lower than the estimated growth rate of Mexico’s GDP per capita, indicating a relative deterioration in the income of Mexican families that received remittances compared to those that did not.
Mexico remains the main recipient of remittances in Latin America and the Caribbean, receiving 41.2% of all transfers to the region. The majority of these funds come from the United States (96%) and 1.8% from Canada, where most Mexican emigrants live.
The Inter-American Development Bank also noted a decrease in Mexican migrants in the United States, but stated that migratory flows do not have an immediate effect on remittances, as migrants need time to settle and find work before they can start sending money.
Overall, remittances received by countries in Latin America and the Caribbean are projected to reach $156 billion during 2023, with significant growth expected in Central American countries (13.2%), Mexico (9.8%), and South America (7.9%).