MEXICO CITY — It was an intuitive prediction, supported by virtually every expert who had studied the subject: As the coronavirus pandemic caused the global economy to tumble, remittances to Mexico and Central America would crash.
It turns out the forecast was wrong.
Instead of collapsing, remittances to Mexico were up year-over-year in five of the first six months of 2020. In June, payments to El Salvador, Guatemala, Nicaragua and Honduras also increased compared with the same period in 2019, after a dip earlier this year.
In March, the month the World Health Organization declared a pandemic, remittances to Mexico topped $4 billion — a record.
“I remember thinking, ‘Oh, my God, what happened here?’ ” said Jonathan Heath, deputy governor of Mexico’s central bank. “It’s the exact opposite of what we were expecting.
For years, the logic behind remittances — the payments that migrant workers send back home — was straightforward. As more people migrate and as economies in the developed world grow, remittances increase. During economic contractions, when immigrants are disproportionately vulnerable, remittances fall. So when the World Bank predicted in April that the pandemic would cause their “sharpest decline in recent history,” it seemed reasonable.