No one dollar is worth the same: Comparing Mexico’s top sources of foreign currency

The poor living abroad have kept Mexico’s economy afloat; it now needs the rich to do their bit.

In Mexico, there are two big sources of private foreign currency inflows:

Source: Banxico/SE

There are of course others, but with strings attached:

Tourism has inched up year after year but is still a distant third. Oil revenue is still very much a State-run operation in Mexico, so not quite private. Exports are traditionally seen as Mexico’s main source of foreign income, but there are now worries that the current boom is actually a low value-add surge driven by an import glut. And, finally, this report will focus on legal flows, so no cartel money today.

That leaves remittances and foreign direct investment (FDI) as the reigning champions, but their effect on the Mexican economy is significantly different. The raw dollar amounts hide a complex and evolving story.