Mexico’s remittance inflows declined by 5.1% year-on-year in the first eleven months of 2025, according to new data from the Bank of Mexico (Banxico). The country received USD 56.47 billion from citizens abroad during this period, down from USD 59.52 billion in the same stretch of 2024. This marks the first annual contraction in remittances since 2012, ending more than a decade of uninterrupted growth.
The downturn reflects a combination of fewer transactions and shifting policy dynamics in the United States, the primary source of these funds. Banxico attributed the decline to a 7.9% drop in the number of remittance operations, partially offset by a 2.4% increase in the average amount sent per transaction, which rose to USD 396.
The contraction coincides with tighter U.S. immigration enforcement and the mid-2025 introduction of a 1% tax on remittances sent via cash, money orders, and similar instruments under the administration of President Donald Trump. While most remittances—99.1%—are sent electronically and thus not directly taxed, the measure appears to have had a chilling effect on overall flows.
The rise in average remittance size suggests continued commitment from migrant workers despite fewer transfers.
President Claudia Sheinbaum has publicly criticized the U.S. tax, calling it a violation of bilateral agreements on double taxation. In response, her government launched a reimbursement program aimed at offsetting costs for affected Mexican nationals sending money home.
Remittances are a critical source of income for millions of Mexican households and accounted for nearly 4% of Mexico’s GDP in 2024. The decline raises questions about economic resilience in regions heavily dependent on these inflows, particularly rural areas where alternative sources of income are limited.
Despite the overall drop, the rise in average remittance size suggests that senders may be compensating for fewer transactions by sending larger amounts when they do transfer funds. This could indicate continued commitment from migrant workers to support families back home, even amid policy headwinds.
In November alone, remittances fell by 5.7% compared to the same month in 2024, totaling USD 5.13 billion. The monthly data underscores a broader trend: Mexico has now recorded eight consecutive months of year-on-year declines in remittance inflows.
While the long-term impact of U.S. policy changes remains uncertain—particularly if legal challenges or diplomatic negotiations alter their scope—the current trajectory points to potential vulnerabilities in Mexico’s external accounts and domestic consumption patterns.
Some analysts note that Mexico’s growing role as a nearshoring destination may help cushion macroeconomic impacts by boosting exports and investment inflows. However, for many households reliant on remittances for daily expenses, such structural shifts offer little immediate relief.
