GLOBAL ECONOMY

Remittances to Mexico now country's top source of foreign income, reaches $24.8B

MIAMI - MAY 11:  Rachel Garcia takes cash from Ramon Cruz (R) for a $300 wire transfer via Western Union to Cuba, which Cruz left three years ago, the money will be received by his mother still living on the island May 11, 2004 at a Check Cashing USA store in the Little Havana neighborhood in Miami, Florida. The Cuban government announced that many sales in U.S. dollars would be suspended indefinitely. The government blamed the new measure on the Bush Administration's decision last week to tighten trips and cash remittances to the island. (Photo by Joe Raedle/Getty Images)

MIAMI - MAY 11: Rachel Garcia takes cash from Ramon Cruz (R) for a $300 wire transfer via Western Union to Cuba, which Cruz left three years ago, the money will be received by his mother still living on the island May 11, 2004 at a Check Cashing USA store in the Little Havana neighborhood in Miami, Florida. The Cuban government announced that many sales in U.S. dollars would be suspended indefinitely. The government blamed the new measure on the Bush Administration's decision last week to tighten trips and cash remittances to the island. (Photo by Joe Raedle/Getty Images)  (2004 Getty Images)

The central bank reported Tuesday that money sent home by Mexicans overseas hit nearly $24.8 billion last year, overtaking oil revenues for the first time as a source of foreign income.

Remittances were up 4.75 percent from 2014 when they totaled $23.6 billion, the Bank of Mexico said. They had never before surpassed petroleum since the Bank of Mexico began tracking them in 1995.

Analysts pointed to slumping global prices for oil, which earned Mexico $23.4 billion in 2015, and improved economic conditions in the United States, home to more than 11 million Mexicans and the source of nearly all Mexico's remittances.

"There is an advance in the recovery of the U.S. economy that has a very high correlation to jobs available for immigrants, and that has a very important impact on the amount of money they send to Mexico," said Alfredo Coutino, Latin America director for Moody's Analytics.

Alejandro Cervantes, an economist with Grupo Financiero Banorte, said remittances' rise over oil reflects an economy that has diversified since the North American Free Trade Agreement took effect in 1994.

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"Before NAFTA the flow of petroleum exports represented nearly 80 percent of the total dollar income for the Mexican economy," Cervantes said, noting that today it is less than 20 percent. "The lesson is that the Mexican economy, on the whole, is no longer so dependent on oil."

Manufacturing exports are currently Mexico's No. 1 source of foreign income.

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