(Bloomberg) -- Mexico’s remittances reached another record in October, powered by the U.S. economic recovery and a weaker peso that encourages workers abroad to send money back home to support their families.
Latin America’s second-largest economy posted $4.82 billion in money sent by Mexicans abroad in October, the biggest inflow on record and a 34% gain compared to a year ago, the central bank said on its website Wednesday. The result topped all analyst estimates in a Bloomberg survey, which had $4.58 billion as the average forecast.
The number of individual transactions grew to over 12.5 million, up from 11.6 million in September, according to the central bank.
Alberto Ramos, an economist at Goldman Sachs Group Inc (NYSE:GS)., wrote in a note that generous wages in the U.S. combined with a contraction of economic activity in Mexico and a competitive exchange rate led to the record amount.
“Solid workers’ remittance flows have been adding support to the current account and to private consumption, particularly for low-income families, who have a high propensity to consume and are the overwhelming recipients of such transfers,” he wrote. “The moderating activity and income growth profile in the U.S. should lead to a moderation in remittance flows to Mexico in coming quarters.”
Mexico’s President Andres Manuel Lopez Obrador has for months lauded the contribution of workers abroad, stating earlier this month that Mexico was on track to reach a total of $50 billion in remittances by the year’s end. Remittances to Mexico surpassed $42 billion so far in the first ten months of the year.
©2021 Bloomberg L.P.