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Monthly remittances to Mexico surge above $5 bln for first time ever in May

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MEXICO CITY, July 1 (Reuters) - Remittances sent to Mexico, a major boon for Latin America's second-largest economy and especially for low-income families, reached an all-time high of $5.17 billion in May, central bank data showed on Friday.

It was the first time monthly remittances surged past the $5.0 billion mark and compares with $4.72 billion in April and $4.53 billion in May 2021.

Mexicans abroad, mostly in the United States where economic growth benefited from stimulus measures in the aftermath of the pandemic, are sending more money to help relatives at home as Mexican President Andres Manuel Lopez Obrador struggles to deliver on promises to energize the domestic economy.

"Generous wage/income support fiscal transfers in the U.S., a competitive MXN/USD level, and a deep contraction of activity and employment in Mexico have acted as both push and pull drivers of dollar remittances from the U.S. to Mexico in 2020-21," Goldman Sachs economist Alberto Ramos said in a research note.

Ramos said that, considering the moderating activity and income growth profile in the United States, as well as a high base for remittances in 2021, remittance flows should ease in the coming quarters.

Analysts at Mexico's Grupo Financiero Banorte said that May tends to be the strongest month of the year for remittances as more money is sent home to Mexico for Mother's Day. (Reporting by Valentine Hilaire; Editing by Anthony Esposito and Jonathan Oatis)