Mexico | Inflation stalls growth of remittances: +0.1% in real terms in October

Summary

Remittances have accumulated a 30-month consecutive upward streak, since May 2020. Despite their dynamism, the inflation in basic basket products (+8.4% in October 2022) and the strength of the Mexican Peso against the US dollar have stagnated the growth of remittances in real terms.

Key points

• Key points:
• In the month of October, 5.360 million dollars were received in remittances in Mexico, +11.2% compared to 2021, with which they accumulate a streak of 30 consecutive months of growth.
• Despite the momentum of the flow of remittances in dollars, inflation in the basic basket in Mexico, +8.4% annualized in October 2022, coupled with the strength of the Mexican Peso against the US dollar, cause the growth of remittances in real terms to stall, they only increased 0.1% in October.
• At BBVA Research, we estimate that remittances to Latin America and the Caribbean could grow more than 12% by the end of 2022 and add a flow of 146 billion dollars, higher than the 4.4% projected in mid-year by the World Bank.
• 80% of the remittances that arrive in Latin America and the Caribbean are received by 6 countries: Mexico, Guatemala, the Dominican Republic, Colombia, Honduras and El Salvador.

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