Fall in remittances to Mexico in October - a data quirk

With Ani

According to the Banco de Mexico, remittance flows to Mexico declined 36% in October 2009 on a year on year basis, the largest fall ever recorded. A closer look at the data, however, shows that the latest number overstates the drop, as the same month last year saw an unusual surge in remittances as migrants took advantage of a sharp depreciation of the Mexican peso against the U.S. dollar to send additional remittances (see figure and blog post). 

In fact, remittances in October 2009 were almost flat compared to the previous months. As we have noted before (see our latest brief), remittances to Mexico, which lag housing starts in the U.S. by 4-6 months, are likely to recover in the coming months (see figure).