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 News Around the Republic of Mexico | March 2008 
Mexican Worker Money Transfers Drop at a Record Pace
 Valerie Rota - Bloomberg
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Overseas Mexican workers' money transfers to their families at home fell at a record pace in January as a U.S. housing slump squeezes migrants' employment.
Remittances, the second-biggest source of dollar flows into Mexico after oil exports, fell 5.9 percent from a year earlier to $1.65 billion in January, the central bank said today. It was the biggest decline since Banco de Mexico began tracking the data in 1995.
The decrease threatens to crimp spending by Mexican families, and mirrors the weakness in the top industry for Mexicans abroad, U.S. construction. Wal-Mart de Mexico SAB, Latin America's largest retailer, fell for the first time in three days, dropping 1.1 percent to 40.4 pesos at 12:08 p.m. New York time.
"What's a little disturbing about the data is that, at least historically, remittances tended to turn up when the Mexican economy was showing some slowing," said Gray Newman, chief Latin America economist at Morgan Stanley in New York.
Mexico's government expects economic growth to slow to 2.8 percent this year, from 3.3 percent in 2007, partly because of a slumping U.S. economy.
The U.S. construction industry accounts for about 20 percent of jobs for Mexicans living in the country, according to Mexico's central bank. Almost 90 percent of transfers received in Mexico go to consumption.
To contact the reporter on this story: Valerie Rota in Mexico City at vrota1(at)bloomberg.net |
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