Mexico sees recovery in migrants' remittances
Tuesday, 11 September 2007
Adam Thomson
MEXICO's monthly remittance figures have shown a recovery in the amount of cash Mexican migrants send back to their families, according to a senior official at the country's central bank.
Jesús Cervantes of the Bank of Mexico told the FT in a recent interview week that it was going to be a positive year [compared with 2006]."
Meanwhile, analysts expressed concern about the sluggish growth of remittances so far this year. The earlier published figures - for May and June - showed even smaller flows than during the same months in 2006. Indeed, May was the first month to record a year-on-year fall in remittances since December 1999.
Many of them have cited the contraction in the US construction sector as one of the principal reasons for the poor performance.
According to the central bank, between 20 and 25 per cent of Mexicans living in the US are employed in construction.
In recent years, remittances to Mexico have grown so quickly that they have become the second most important source of foreign exchange after oil.
They have also turned into a vital source of income for millions of poor families throughout the country.
But the flow of cash from Mexicans living abroad - most of them illegally in the US - grew just 0.6 per cent during the first six months of this year, according to the central bank.
Last year, by contrast, they grew 23 per cent during the same period.
Mr Cervantes admitted that the days of high growth of remittance flows were almost certainly over, thanks to the slowdown in the US construction industry, tighter border controls and the crackdown on illegal immigrants already in the US, as well as other factors.
But he also pointed out that the effects had only slowed the rate of growth in remittances rather than reducing the total amount entering the country.
Asked why May and June had reflected a contraction, Mr Cervantes said that one possible explanation was the heightened expectation during those months that the US Congress would pass legislation allowing undocumented migrants to work legally.
That expectation, he said, could have made many of the estimated 8.0m illegal Mexicans in the US start saving money to cover expenses associated with obtaining documents instead of sending it home.
"There were several proposals being debated in Congress, but all of them would have involved migrants paying money in legal and other fees," he said.
.........................................
— FT Syndication Service
MEXICO's monthly remittance figures have shown a recovery in the amount of cash Mexican migrants send back to their families, according to a senior official at the country's central bank.
Jesús Cervantes of the Bank of Mexico told the FT in a recent interview week that it was going to be a positive year [compared with 2006]."
Meanwhile, analysts expressed concern about the sluggish growth of remittances so far this year. The earlier published figures - for May and June - showed even smaller flows than during the same months in 2006. Indeed, May was the first month to record a year-on-year fall in remittances since December 1999.
Many of them have cited the contraction in the US construction sector as one of the principal reasons for the poor performance.
According to the central bank, between 20 and 25 per cent of Mexicans living in the US are employed in construction.
In recent years, remittances to Mexico have grown so quickly that they have become the second most important source of foreign exchange after oil.
They have also turned into a vital source of income for millions of poor families throughout the country.
But the flow of cash from Mexicans living abroad - most of them illegally in the US - grew just 0.6 per cent during the first six months of this year, according to the central bank.
Last year, by contrast, they grew 23 per cent during the same period.
Mr Cervantes admitted that the days of high growth of remittance flows were almost certainly over, thanks to the slowdown in the US construction industry, tighter border controls and the crackdown on illegal immigrants already in the US, as well as other factors.
But he also pointed out that the effects had only slowed the rate of growth in remittances rather than reducing the total amount entering the country.
Asked why May and June had reflected a contraction, Mr Cervantes said that one possible explanation was the heightened expectation during those months that the US Congress would pass legislation allowing undocumented migrants to work legally.
That expectation, he said, could have made many of the estimated 8.0m illegal Mexicans in the US start saving money to cover expenses associated with obtaining documents instead of sending it home.
"There were several proposals being debated in Congress, but all of them would have involved migrants paying money in legal and other fees," he said.
.........................................
— FT Syndication Service