Mexico Remittances Edge Up to US$4.4 Billion, Pace Slows

Mexico’s remittance inflows entered a slowdown in early 2026, with February receipts totaling US$4.4 billion amid shifting US labor dynamics and tighter migration policies. Despite modest gains in dollar terms, peso appreciation and inflation drove an 18.7% drop in real purchasing power for 4.9 million recipient households. The decline — marked by the lowest transaction volumes in 12 months — signals rising macroeconomic pressure on private consumption and social welfare.

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Remittance inflows to Mexico reached US$4.4 billion in February 2026, a marginal 0.4% increase from US$4.450 billion in the same month of 2025. Despite the slight year-over-year gain, data from Mexico’s Central Bank (Banxico) indicates a second consecutive month of deceleration following a peak of US$5.3 billion recorded in December.

This slowdown marks a shift from the trend observed between May and December 2025, when monthly inflows consistently exceeded US$5 billion. Analysts attribute the cooling to macroeconomic volatility and shifts in the US labor market.

The purchasing power of Mexican households continues to erode due to the sustained strength of the peso and domestic inflation. In February, remittances in local currency fell 18.7% in real terms, largely reflecting an 18.8% annual appreciation of the peso against the US dollar.

Alberto Ramos, chief economist for Latin America, Goldman Sachs, noted that the exchange rate remains a significant headwind. “The weakening of the dollar and its impact on the Mexican peso’s exchange rate continues to erode the purchasing power of remittances,” he said. February marked the ninth consecutive month of annual contraction when remittances are measured in constant pesos.

Transaction volume also fell to its lowest level in a year. Banxico reported 11.3 million operations in February, with an average transfer of US$395. Janneth Quiroz, director of economic analysis, Monex, said transaction volume is a key indicator of employment stability for Mexican workers in the United States.

January Contraction and Structural Headwinds

The February data followed a weak start to the year. In January 2026, remittance inflows totaled US$4.5 billion, a 1.4% annual decline — the first negative January reading since 2015. The figure also represented a 13.5% drop from December 2025.

Juan José Li Ng, senior economist, BBVA, suggested the December surge was temporary. “The increase in December could have been unusual, possibly explained by the advance sending of these resources to avoid paying the new tax on cash remittances,” he said.

The erosion in purchasing power was also evident in January, when the real value of remittances fell 18.2% as the peso appreciated 16.1% against the dollar. Jesús Cervantes González, head of the Remittance Forum at Center for Latin American Monetary Studies, noted that for the 4.9 million recipient households in Mexico, reduced purchasing power directly affects spending on food, housing and healthcare.

In January, 11.5 million transactions were recorded, a 5.2% decline year over year. While the average transfer rose to US$401 (up 3.9%), it was insufficient to offset the drop in transaction volume.

Labor Market and Migration Patterns

CEMLA reported that structural changes in the United States are affecting remittance flows. The average age of Mexican migrants is increasing, while new migration has slowed due to stricter immigration policies.

“Gradually, migrants in the United States have begun to send fewer remittances to Mexico as they address other obligations during their stay,” CEMLA noted, adding that the trend is likely to intensify in the coming years.

CEMLA estimates that the annual wage mass of Mexican immigrant workers declined from US$383 billion in the second quarter of 2025 to US$369 billion by year-end. Of that total, approximately US$309 billion remained in the United States to cover expenses such as housing, taxes and social security — equivalent to about 84% of income.

Cumulative Inflows and Market Outlook

For the 12-month period ending in January 2026, cumulative remittances reached US$61.7 billion, slightly below the US$61.7 billion recorded for full-year 2025.

Electronic transfers remained the dominant channel, accounting for 98.6% of January inflows (US$4.5 billion). Cash transfers represented 1.2% (US$54 million), while money orders accounted for 0.2% (US$11 million).

Banxico also recorded US$99 million in remittance outflows from Mexico in January, a 9.3% annual decline. This resulted in a remittance surplus of US$4.4 billion, down from US$4.5 billion a year earlier.

Economists expect 2026 to remain challenging. Analysts at Valimex project a “contained performance” for the remainder of the year, citing pressure from a strong exchange rate and persistent inflation. Meanwhile, specialists at Banorte anticipate that stricter measures affecting Mexican migrants in the United States, along with new taxes on international transfers, could further weigh on growth in a sector that remains a critical financial lifeline for millions of households.