By Anthony Harrup
MEXICO CITY--Remittances to Mexico exceeded $5 billion for a second consecutive month in June as senders increased the average amount of money they transferred home.
Mexicans abroad sent home $5.15 billion in June, 15.6% more than in the year earlier month and just shy of the record $5.17 billion in May, the Bank of Mexico said Monday. In the first half of the year, remittances totaled $27.6 billion, 16.6% more than in the first half of 2021.
The average amount of each transfer was $408 in June, the second-highest on record.
Considering cost-of-living increases in the U.S., which is the source of 95% of remittances to Mexico, "this suggests that migrants have been able to adjust their consumption baskets as a result of price changes, shielding them at least partially from being affected by those items that have had the most sizable increases," analysts at Grupo Financiero Banorte said in a note.
U.K.-based money-transfer company WorldRemit said an online survey it conducted among remittance senders in countries including the U.S. showed that inflation is having an effect on both senders and recipients.
"Migrants around the world actively conserve daily spending in order to sustain their ability to send money home to support loved ones," WorldRemit said.
Nearly half of the respondents in the June survey said they were eating out less to save on day-to-day expenses, while three-quarters said recipients were also feeling the pinch of higher prices, encouraging many to send more money home for expenses such as health care, education and monthly bills, WorldRemit added.
Inflation in Mexico is above 8%, its highest level in more than 21 years.
Banorte expects remittances to Mexico will reach a record $56.5 billion this year, but sees risk in economic weakness in the U.S., where gross domestic product contracted in the first and second quarters.
Banorte said the rise in U.S. initial jobless claims in recent months suggests the slowdown is starting to creep into the labor market. "This situation could also affect Mexican migrants in the U.S., and ultimately, remittances," Banorte added.
Write to Anthony Harrup at email@example.com
(END) Dow Jones Newswires
August 01, 2022 14:59 ET (18:59 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.