Mexican Workers Defy Estimates by Sending Record Cash Back Home

(Bloomberg) -- Mexican remittances beat economists’ expectations for a sixth consecutive month, providing much needed support to low-income families as activity collapses and unemployment jumps.

Mexican workers abroad sent home $3.53 billion in July, 7.2% more than a year ago and well above the $3.34 billion average analyst estimate in a Bloomberg survey.

Stronger-than-expected remittances are a rare bit of good news for Latin America’s second-largest economy, which is on track in 2020 to suffer its deepest recession in nearly a century. President Andres Manuel Lopez Obrador forecasts Mexico getting a record $40 billion from its workers outside the country this year after a 10% annual increase in remittances between January and July.

In the U.S., “Mexicans have remained employed and are probably also sending home some savings to support those who stayed in Mexico,” said Marco Oviedo, an economist at Barclays in New York. “To the extent that employment continues to recover and those who lost their jobs rejoin, this more or less stable flow will continue.”

©2020 Bloomberg L.P.