Fall in the purchasing power of remittances marks its longest period in 10 years

However, according to an analysis by Banco Base, remittances have accumulated a loss of purchasing power in recent months.

“Remittances lost purchasing power again in March, spinning 5 consecutive months with losses. When converting the figure of 5,193.78 million dollars of remittances received in March to Mexican pesos, with an average exchange rate of 18.3749 pesos per dollar (taking as reference the FIX exchange rate) and adjust the series for observed inflation using the National Consumer Price Index (INPC), it is obtained that the flow of remittances in March was 7.40% lower than that observed in March 2022“said Gabriela Siller, director of economic analysis at Banco Base.

The analyst also points out that such a prolonged drop in the purchasing power of remittances, at an annual rate, had not been observed since the period of January 2012 and August 2013, when they fell for 13 consecutive months.

Between March 2022 and March 2023, the peso appreciated 10.61% against the dollar. While inflation had an annual increase of 6.85%. These two factors affected the loss of value of the remittances that, in fact, are exchanged and spent in pesos by the receiving families.

Entities of the country with the worst impact

The states of Guanajuato and Michoacán are among the states that receive the most remittances year after year. But considering inflation by state and the appreciation of the peso, they have also suffered losses in the purchasing power of the dollars they receive.

Guanajuato, for example, received 1,171.93 million dollars in the first quarter of 2023. An annual growth of 12.01% in dollars, but with a loss of purchasing power in pesos of 5.05%.

Michoacán received 1,217.48 million dollars between January and March of this year, but with a 13.25% lower purchasing power in real pesos.