The graph above was sampled from this post at The Dialogue by Manuel Orozco and Patrick Springer:
Over the past few years, Mexicans have sent money back home to their families, friends, and others. Between 2017 to 2022, remittances sent to Mexico from the US have experienced double-digit growth, and during pandemic times (2020-2022) they nearly doubled in absolute numbers to 41 percent. In 2022, remittance volume reached a 20 year high at nearly US$59 billion. In 2023, over US$63 billion was remitted representing a growth rate of eight percent year over year (YoY). While remittance growth rates are showing signs of deceleration, volume is estimated to reach over US$65 billion by the end of 2024.
In the current context, remittance volume will continue and play a central role in US-Mexico relations. As was the case in 2023, remittance growth this year can be attributed to simultaneous increases in migration to the US, transfer frequency, number of senders, and the annual principal amount. Based on available data and current trends, remittance volume will grow by approximately three percent in 2024. This growth rate is lower than rates forecasted for the top 10 recipient countries in Latin America and the Caribbean (LAC).
I suspect that the sharp increase in remittances is due to a combination of inflation and the sharp increase in new migrants. I further suspect that new migrants are more likely to send remittances back to Mexico than long-term migrants.
A number of matters are addressed in the post including not just the increase in remittances but the role of remittances in Mexican economy, the relationship between the U. S. consumer price index and remittances, the relationship between the Mexican consumer price index and remittances, etc.
One last point. Remittances regardless of their destination country represent disinvestment in the United States. $63 billion is quite a bit of money but it’s a minuscule percentage of U. S. GDP—less than 1%. It’s a couple of percent of domestic investment.
Seems more related to economic conditions in the US, though the number of immigrants is also related to that factor to some extent.
Steve
And don’t overlook the laundering of drug money in $1,000 increments .