The Inter-American Development Bank predicts that remittances to Mexico will hit a new high of $64.247 billion by the end of 2023, representing an increase of 9.8% from the previous year. However, despite this growth, the peso’s appreciation against the dollar means that its value in Mexican currency will drop by 3.4%, with further depreciation due to inflation.
Despite this decrease in value, these remittances will still account for 3.9% of Mexico’s GDP. However, this growth rate is 41% lower than Mexico’s estimated GDP per capita growth rate, indicating a relative decline in the income of Mexican families receiving remittances compared to those who did not receive them.
Mexico remains the largest recipient of remittances in Latin America and the Caribbean, receiving 41.2% of all transfers to the region. Most of these funds come from the United States (96%) and Canada (1.8%), where most Mexican emigrants reside.
The Inter-American Development Bank also noted a decline in Mexican migrants in the US but stated that migratory flows have no immediate impact on remittances as migrants require time to settle and find employment before they can start sending money.
Overall, remittances received by countries in Latin America and the Caribbean are expected to reach $156 billion by 2023, with significant growth observed in Central American countries (13.2%), Mexico (9.8%), and South America (7.9%).