Mexico | Remittances in the time of COVID-19: hypothesis and different effects by region

Summary

In the second quarter of 2020, very marked differentiated effects were seen in remittances by region. The states of the Northwest region and the Traditional region presented increases in their flow of remittances, while the Central and South-Southeast region contractions, which leads us to propose THREE HYPOTHESES.

Key points

• Key points:
• In June 3,537 million US dollars (md) entered Mexico through remittances, + 11.1% at an annual rate; in real terms the growth was 23.8%. In the first half, remittances have accumulated 19,075 md, 10.5% more than was received in the same period of the previous year (17.255 md).
• During June, a recovery was observed in remittances to Latin America and the Caribbean. The Dominican Republic received 25.7% more remittances, while Guatemala and El Salvador experienced growth of 9.2% and 9.8%, respectively.
• Hypothesis 1: Many cross-border migrants and commuters sent remittances to Mexico, rather than delivering them directly.
• Hypothesis 2: Remittances from migrants from diasporas that are more established in the United States were largely unaffected by the COVID-19 crisis.
• Hypothesis 3: Remittances from recently arrived migrants with fewer social networks may have been the most affected by the COVID-19 crisis.

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