#481
Funds For The Folks Back Home
Published:
Mar 27, 2023
Author:
Sarah Parsons Wolter
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In 2022, remittances to Mexico grew by 13.4%, amounting to a total of $58.5b for the year. In another record-breaking year, Mexico expects that number to grow to over $60b in 2023. Remittances have surpassed all other sources of the country’s foreign income, including tourism, manufacturing and oil exports, making Mexico the second largest remittance-receiving nation in the world after India. The record flows in Mexican remittances are in large part attributable to the resilience of the US labor market. But looming fears of a US recession have casted doubts over the nation’s ability to sustain that same level of growth.
However, Mexico may have one more economic ace up its sleeve to buoy their economy as we head into the current macro environment. Earlier this month, Elon Musk confirmed that a manufacturing facility would be built in Nueva Leon - signaling the production of the first Tesla cars in Mexico. In what is being touted as “the biggest electric vehicle plant in the world”, the $5b investment into the gigafactory would employ 6000 workers.
As nearshoring gathers momentum, Mexico looks set to benefit from the shifting landscape of the global supply chain, particularly as companies think about diversifying exposure from China. As the governor of Nueva Leon said in a speech, “The president, by authorizing and backing Tesla, sent a message to the world that they should come to Mexico.” Remittances may no longer be the only game in town, Mexico may have just found its newest catalyst for growth.
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Funds For The Folks Back Home
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Select Financings
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