Annual remittances in Mexico down for first time

Times have been increasingly difficult in Mexico, particularly in light of the country’s problem with rampant violence. A weakening economy is one problem the country could use without.

Unfortunately, the country’s economy may be worsening if the latest data on remittances to Mexico is any indication:

For the first time since Mexico's Central Bank began keeping records (13 years ago), total annual remittances from the US have fallen.

The numbers themselves, released by the Central Bank on Tuesday, are not dramatic. Mexicans sent $25 billion to their families in 2008, down from $26 billion the year before, representing a 3.6 percent decline.

But the break in the trend is significant, say economists. Less cash coming to low-income families who then spend it on goods and services, will mean more frugal spending, which will in turn be a further drag on the Mexican economy this year. And it will impact millions of families whose entire incomes depend on the dollars sent from men and women working as construction workers, lettuce pickers, and housekeepers from California to New York.

The decline in remittances is expected to become a global trend; this would be a severe blow to Latin American countries whose economies depend strongly on money transfers. Countries like El Salvador and Jamaica have suffered from diminishing remittances which have hurt their respective economies.

Image- Foreign Policy
Online Sources- The Latin Americanist, csmonitor.com, Jamaica Gleaner, BBC News, LAHT,