What is not clear is whether what has happened is a cyclical or structural change. The cyclical argument is that the slowdown in the US economy has changed the composition of the flow of remittances to Mexico; once the US economy picks up pace again, the flow remittance should also increase. The structural argument on the other hand, holds that Mexicans have moved back from the US.
What is clear is that 2007 was the peak year for remittances: almost US$26bn flowed from the US to Mexico. By 2009 the figure was down to US$21bn.
What is interesting is that the number of transactions fell by 11% between 2007 and 2009, while the average size of each transaction fell by 8%.
The national census of household income and expenditure for 2010 found that Mexico had just over 29m households. Of these, just fewer than 5% (4.7m) received some remittance income. In 2006, 7% of households received remittances and in 2008, 5.9% did. The demographers calculate that the change means that 2m people no longer receive remittances.
In rural areas (i.e. municipalities with less than 2,500 inhabitants) the number of households receiving remittances has dropped from 33% in 2006 to 22% in 2010. BBVA is forecasting that in 2011 remittance inflows to Mexico will rise by about 5% and the number of households receiving them will increase to 1.39m.
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