Drop in Remittances Could Hurt Mexico (1)

The Mexican economy could be severely impacted should remittances from abroad, currently flat, start to decrease, according to Donald Terry, manager of the multilateral investment fund of the IDB. “After oil, remittances are the No. 2 source of capital going into the country,” Terry tells LatinFinance. Currently 5-6 million families, already on the lower end of the social scale, depend on the money sent from abroad. “You’ll see poverty levels increase in Mexico,” Terry says. A drop in remittances to Brazil is actually a good sign, according to Terry, as more Brazilians stay home or return from abroad because of better economic conditions at home and the appreciation of the BRL. Overall, the panorama for remittances to LatAm remains stable, Terry states. “I don’t think remittances are going down. They are flat. But they are not increasing either,” he says.