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Money sent home by Mexicans falls sharply

/ Source: The Associated Press

Mexicans living in the U.S. sent home 12 percent less money in August, the largest drop on record since the Bank of Mexico began tracking remittances 12 years ago, the central bank reported on Wednesday.

Remittances are Mexico's second-largest source of foreign income, next to oil exports.

A slowing U.S. economy and stepped up immigration enforcement by the U.S. government, including record deportations and increased border security, are behind the drop.

Remittances began dropping early this year, economically stranding many small towns and neighborhoods that live off the stipends. The Bank of Mexico said remittances will likely continue to fall in the coming months because of the "difficult problems the U.S. economy faces."

Down from $2.2 billion
The bank said remittances in August dropped 12 percent to $1.9 billion. That compares to $2.2 billion in August 2007.

Migrants living in the U.S. have sent home $15.5 billion in the first eight months of this year, 4 percent less than the same period the year before.

Nearly all of it comes from the United States, home to 98 percent of Mexicans living abroad. At least 11 million Mexicans live in the United States.

Mexico's economy has largely weathered the global economic crisis, buoyed by a national housing boom and government-funded infrastructure programs.

But Treasury Secretary Agustin Carstens said this week that Mexico will still be hit by the global crisis, as tourism drops and continued volatility deflates oil and other commodity prices. He has lowered his annual growth forecast for Mexico to 2.5 percent.