Mexicans living in the US sent home a staggering $63.2bn in remittances last year and President Andrés Manuel López Obrador hailed the news as a triumph. “This means that living conditions . . . improve and poverty is reduced,” he crowed in a speech last week.
Remittances have almost doubled under the populist left winger’s presidency from $34bn in 2018. Mexicans send more money home each year than any other country except India, whose population is more than 10 times bigger, according to World Bank data. Mexican remittances are now equal to 20 per cent of the federal government’s entire budget.
Investors are happy too. The flood of remittances has helped make the Mexican peso one of the developing world’s strongest currencies in recent years, generating handsome returns for those who parked their money in pesos and reaped the additional benefit of a big interest rate differential with the US.