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The state of Baja California recorded a historic high in the reception of remittances from citizens residing outside the state who send money to their relatives.
Mexico reached a historic record by accumulating more than 58 billion dollars in remittances during 2022. According to the Central Bank, the number of Mexicans abroad sending money to their relatives in the country grew exponentially last year, due to the difficult economic situations that have arisen in recent years.
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Mexicans on the northern border, especially those from the state of Baja California, are the ones who find the most benefits in this increase in remittances, especially in a scenario affected by inflation and high interest rates.
The Economic Studies Center of Baja California indicated that remittances from family members abroad continue to be one of the most important components of the state’s economy, and so far in 2023, there has been a 6.6% increase in remittances compared to 2022.
Why do remittances benefit the country’s economy?
Remittances are money transfers that people who leave the country send to their relatives in their country of origin to help them, and they are sources of income for entire families in developing countries, such as Mexico.
Sending money to countries like Mexico can have social and economic impacts, such as reducing poverty, stimulating consumption and investment, and strengthening the financial stability of families and communities.
Remittances are one of the main lifelines for families and the places where they live. In the case of Mexico, remittances played a significant role in helping the country’s economy grow by 3% in 2022, which was an encouraging figure following the crisis caused by the coronavirus. In the month of December alone, Mexico received just over 5 million dollars, of which 99% was through electronic transfers.
How much does Baja California receive in remittances?
The historical figures reached this year suggest the large number of migrants who have chosen to leave the country in search of better opportunities. The majority of Mexicans who leave the country primarily go to the United States. Tijuana, Guadalajara, and Morelia were the municipalities in the country that received the highest amount of remittances in 2022, according to data from the Central Bank.
The United States is the main country of origin for remittances sent to Mexico, as it is home to over 12 million Mexicans. According to data from the Center for Latin American Monetary Studies, out of the over 58 billion dollars that entered Mexico last year as remittances, approximately 55,864 million originated from the United States, which represents 95.5% of the total.
The amount of remittances received in Baja California has experienced a drastic increase in the past three years. In 2016, a total of 169 million dollars were recorded, while in the first 3 months of 2023, 342 million dollars have been received in remittances. According to the Economic Studies Center of Baja California, 40% of households in the state are beneficiaries of remittances.
“The strong dependence of the state on remittances and income from legally employed residents in the United States, while benefiting many households, also reflects a sick economy incapable of generating its own resources for growth,” the center stated.
Did you know that Baja California is the state that receives the highest amount of remittances in the country?
Sources: Adelante Valle, El País, Forbes México