Mexico is showing stronger growth, projected at 2.5% in 2026, compared with the year before (-3.9%). However, the recovery is narrower than it appears. Most of it is due to transaction size, not volume.

On one side, there is a 5% increase in the principal amount remitted by Mexican migrants and the use of digital transfers, which are typically slightly higher than cash transfers. 

On the other hand, remittance transfers from Mexican migrants continue to decelerate, reflecting declining migration and limited replenishment due to increased deportations (which will reach 200,000 this year) and partly offset by guest worker visas (H-2A and H-2B).

This deceleration remains the lowest in the Latin America and Caribbean region, which will grow 4.5%, and 6% excluding Mexico (last year remittances grew 8%, and 12% excluding Mexico). Remittances to Mexico account for 33% of all flows.

The impact of the Mexican Peso on remittance recipients

More importantly, the peso’s performance plays a key role for recipients. 

Over the past eight years, average remittances have closely tracked the exchange rate; if it depreciates, people send a bit more; otherwise, they send less, but by negligible amounts.  Month-to-month fluctuations respond more to cyclical sending patterns than macroeconomic trends, but households still feel the effects. 

For example, recipient households became materially worse off. The nominal loss of 17 pesos is nearly 9%. Once you deflate this number by prevailing 3.1% inflation, real purchasing power falls by 12%. Therefore, for households, 2026 is a worse year than 2025 despite the soft rebound.

Therefore, the peso’s value is causing more damage than the tax.

A preliminary outlook on remittances in 2027

The following year, remittances will remain at 2% or may naturally grow 4% (if labor migration visas increase), with a steady number of transactions under 12 million (or 9.8 million remitters).

Among the most notable factors to consider for future flows are:

1) U.S. labor demand, particularly with construction employment among undocumented workers down 7.5%;

2) the size of the remitting population;

3) interest rates and the peso, with a still wide carry-trade pointing to continued peso strength (or rather dollar weakness),

4) channel competition, fee compression and new market entrants. A new record remittance flow seems out of reach, with low single-digit dollar growth expected on a continued contracting transaction base, and

5) the likely upcoming sender verification requirement and limitations on financial system access in the United States, and the challenges posed by the Sistema de Pagos Electrónicos Interbancarios (SPEI) dispersion in terms of reporting and money laundering risk.

Nevertheless, the remittance market remains resilient, with the need to send as present as ever, while the means and cost of doing so are evolving rapidly.

Figure 1: Principal Remitted and Peso Foreign Exchange Rate, 07/2018-07/2026

Figure 2: Transactions (,000) and Principal Remitted to Mexico

Figure 3: Peso Foreign Exchange Rate and Principal Remitted