Mexico’s Remittances Post Sharpest Monthly Drop Since 2020 in April

MEXICO · ECONOMY

The money that millions of Mexican households depend on kept growing year-on-year in April, but a sharp slide from March — the deepest for the month in half a decade — points to migrants in the United States sending less, less often.

What the April remittances data shows

The Bank of Mexico, the country’s central bank, reported on Monday that family remittances totalled $4.98bn in April, a 3.7% increase over the same month of 2025. The gain came from a higher average transfer rather than more transfers: the typical remittance rose 5.5% to $403, while the number of operations fell 1.7% to 12.4 million.

The month-on-month picture was weaker. Inflows dropped 9.4% from March’s $5.50bn, and on a seasonally adjusted basis the central bank recorded a 3.5% monthly contraction. Analysts polled by Bloomberg had expected about $5.17bn, so the result missed the consensus. April typically dips because the Easter holidays cut the number of working days for migrants in the United States, but economists at Grupo Financiero Base noted the size of this year’s fall was the largest for the month since the pandemic year of 2020.

A record four-month total, with momentum cooling

Despite the monthly stumble, the cumulative figure set a record. Remittances over the first four months of 2026 reached $19.68bn, up 2.6% from the $19.18bn received in the same stretch of 2025 and the highest January-to-April total on record. Almost all of it, 99.1%, arrived through electronic transfers; cash, in-kind transfers and money orders together made up less than 1%.

Even so, the pace is easing. April’s 3.7% annual rise trailed the 6% gain recorded in March and came in below the average April growth rate of the previous five years. The data follow a difficult 2025, when full-year remittances fell to roughly $61.8bn — the first annual decline in more than a decade — as a U.S. immigration crackdown discouraged some migrants from working and sending money home.

A new U.S. tax in the background

The figures arrive as remittance senders face a new cost. Washington introduced a 1% tax on transfers funded with cash, money orders or cashier’s checks at the start of 2026, a measure expected to weigh most on lower-income households that rely on non-electronic channels. Mexican President Claudia Sheinbaum has criticised the levy and rolled out a program to reimburse affected nationals for what they pay.

Analysts at BBVA and Grupo Financiero Base have linked the softer flows partly to migrants’ reluctance to leave home to work for fear of deportation, a caution that shows up in fewer transactions even as the value of each one rises. For context, remittances dwarf new foreign direct investment as a source of fresh dollars: in the first four months of the year, every dollar of new foreign direct investment was matched by roughly eight dollars of remittances.

Why the numbers matter beyond Mexico

Mexico is the world’s second-largest recipient of remittances after India, and the transfers are the country’s biggest single source of foreign income — ahead of oil, tourism and foreign investment — at close to 4% of gross domestic product. The flows concentrate in central and southern states where formal jobs are scarce, so a sustained slowdown is felt directly in household spending. With the data released just after Mexico reported a 0.6% first-quarter contraction in output, the remittance trend is one more signal that the domestic demand cushion is thinning.