US stimulus helps Mexico's remittances hit record high

MEXICO CITY: Money sent home by Mexicans living abroad hit a record high in March, the central bank said Monday, as US stimulus measures aided a recovery in Latin America's second-largest economy.

Remittances reached $4.15 billion, up 30 percent from February, beating the previous monthly all-time high of $4.04 billion seen a year earlier, the Bank of Mexico said.

The transfers, mostly from the United States, have helped to cushion the devastating blow to the Mexican economy from the coronavirus pandemic.

Experts say the increase in the remittances is due to the economic recovery and fiscal stimulus measures in the United States, a popular destination for Mexican workers.

The $1.9 trillion American Rescue Plan that US President Joe Biden's Democrats pushed through Congress in March included $1,400 payments to most taxpayers.

With the US economic outlook brightening, remittances to Mexico are expected to keep growing this year, analysts at the bank BBVA predicted in a report to clients.

The transfers have become increasingly important for the country in light of the pandemic's damaging impact on other sectors, they said.

"This positions remittances as one of the country's main sources of foreign currency, going directly to households, surpassing the income from foreign direct investment, tourism and crude oil exports in 2020," the report said.

Some 12 million people born in Mexico live in the US, as well as another 26 million second or third generation Mexicans.

Five out of every 100 households in Mexico are estimated to receive money from abroad -- a lifeline for an economy that shrank 8.5 percent in 2020, the worst slump in decades.