Braulio Carbajal

La Jornada newspaper
Wednesday May 27, 2020, p. 24

The entry of foreign currency into the country through remittances has exceeded the amount of resources that Mexican companies and individuals transferred abroad to be deposited in bank accounts or undertake productive activities in another nation by 50 percent since the beginning of the current federal government, reveals official information.

Between January 2019 and March this year, those transferred financial assets and the investment of national companies outside the country totaled $ 29,423 million.

During this period, Mexicans who work abroad, mainly in the United States, sent their families 45,338 million dollars, according to information from the Bank of Mexico (BdeM).

In detail, as of the current federal administration, the assets of Mexicans sent abroad, that is, the money transfers to accounts in financial institutions that operate in other countries, amount to 18 thousand 13 million dollars.

Meanwhile, the direct investment of nationals in other countries, that is, the resources that companies or individuals of Mexican origin allocate to promote projects that are carried out in other latitudes, registers an accumulated of 11 thousand 410 million dollars.

In the case of Mexican assets abroad, according to data from the BdeM, it is noteworthy that in the fourth quarter of 2019 the reported amount was one thousand 91 million dollars. It went to 5.50 million in the first quarter of 2020, which means that in just three months it advanced 360 percent.

Uncertainty, leading to moving money

For Carmen Alcibar, analyst at Grupo Bursamétrica, one of the reasons that has led Mexicans to move their money to foreign accounts is the uncertainty that exists in the country, given the lack of policies by the Mexican government to help fight the crisis. economic caused by the Covid-19 pandemic.

As it is money deposited in accounts it is easy to move and at this difficult time people may be looking for better options outside the country, said the analyst.

Regarding the direct investment of Mexicans abroad, the figure, one thousand 273 million dollars in the first quarter of 2020, has decreased 37 percent compared to the 2.48 billion in the previous quarter and 52 percent compared to the 2 one thousand 677 million from the same period of 2019.

For the specialist in Bursamétrica, the above is a consequence of the fact that companies and individuals have decided to pause in their productive activities projects, given the high uncertainty experienced on a global scale as a result of the economic crisis that the pandemic has brought.

In conclusion, the assets of Mexicans abroad have increased because it is easier to move that money and investors are looking for safer markets due to the uncertainty that surrounds the country due to the decisions of the federal government, such as the cancellation of a brewery and the happened in the electrical sector. Meanwhile, investments in projects from other nations have decreased because there is no good scenario to carry them out, Carmen Alcibar explained.

Going forward, he pointed out, the picture is not at all clear; however, if investors continue to see lack of support from the Mexican government, they will continue to seek other markets. Meanwhile, direct investment will be paused until the health context improves, opening the opportunity for that money to remain in the country, but without the correct policies they will choose to seek better conditions in other latitudes.

In relation to remittances, although last March they registered a record level, specialists predict that in the following months they will report a significant drop.

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