Mexican Remittances Decline 5.1% YTD as Purchasing Power Erodes

Mexican households receiving remittances faced a dual contraction in November 2025, as total inflows fell and the purchasing power of those dollars plummeted. According to Banxico, remittance income totaled US$5.125 billion (MX$92 billion) in November, a 5.7% annual decrease.

While the figure marked the seventh consecutive month with inflows exceeding US$5 billion, the accumulated flow for the first 11 months of 2025 reached US$56.469 billion, representing a 5.1% decline compared to the same period in 2024. Analysts from Goldman Sachs and Banco Base reported that the "Super Peso" and internal inflation have severely impacted the real value of these funds.

Erosion of Purchasing Power

The Mexican peso appreciated 10.2% against the US dollar between November 2024 and November 2025. When combined with internal inflation, the real purchasing power of remittances dropped 14.4% annually in November, marking the sixth straight month of decline for the 4.4 million benefiting households. 

Jesús Cervantes, Head of Economic Statistics, Center for Latin American Monetary Studies (Cemla), told El Economista that the domestic value of the dollar has shifted drastically since the start of the decade. “The purchasing power in Mexico of US$500 in October 2025 was equivalent to US$355.9 dollars in December 2020,” Cervantes González stated. To match the purchasing power of US$500 in 2020, a recipient would have needed US$702.40 by late 2025.

Between December 2020 and September 2025, dollar-denominated remittance income rose 48.8%, yet in constant pesos, the actual purchasing power of receiving households increased by only 4.6%.

The volume of transactions in November totaled 12.6 million operations, with an average shipment of US$406. This represented a 7.9% annual decrease in transaction volume, which analysts view as a barometer for US employment stability.

Janneth Quiroz, Director of Economic Analysis, Monex, explained that the transaction volume is a signal regarding the "strength of employment in the United States for Mexican workers." Alberto Ramos, Latin America Economist, Goldman Sachs, added, “The evolution of the labor market in the United States is a key risk for remittances this year, as well as the salary of low-skilled workers.”

Jesús Cañas, Economist, Dallas Federal Reserve, attributed the slowdown to shifts in migrant behavior and local conditions. “It is likely that the current US migration policy is impacting remittance flows, as immigrant communities deal with the unease of this new threat and the increase in their savings for precautionary reasons,” Cañas said.

BBVA Research suggests the contraction also stems from a lower rate of new Mexican migrants entering the US labor market, a trend observable since 2024. Geographically, the decline has been most pronounced in the states of Chiapas, Guerrero, Michoacan, Zacatecas, and Oaxaca.

2026 Outlook and New Taxation

Expectations for 2026 remain divided among major financial institutions. Banco Base projects a 2.6% rebound, though it anticipates totals will remain below the historic record of US$64.745 billion set in 2024. Conversely, BBVA forecasts a further decline to approximately US$60 billion.

A significant factor for the coming year is the entry of a 1% tax on international remittances sent from the US, effective Jan. 1, 2026. BBVA experts, led by José Juan Li, estimate that Mexicans could pay US$3 billion in taxes between 2026 and 2034. Experts suggested this tax may have prompted a short-term surge in late 2025.

“Among senders who cannot send their remittances through a bank account or a credit or debit card, which would mainly be undocumented migrants, some will possibly choose to move up the sending of resources to avoid paying the tax,” BBVA analysts noted.

According to Banxico, the cumulative 12-month surplus of the remittance account through November 2025 stood at US$60.520 billion, down from the US$60.827 billion recorded for the period ending in October.