Remittances: March Brings a Breather, and Q1 Posts Moderate Growth

March’s rebound lifted the quarterly total, but fewer transactions suggest remittance flows from the United States are normalizing.

Remittance inflows to Mexico bounced back in March, against a backdrop of slowing economic activity and downward revisions to 2025 expectations. According to Bank of Mexico (Banxico) data, the country received $5,394.2 million (USD) during the month—up 4.9% year over year and the highest level since last October. As a result, remittances totaled $14,456.5 million in the first quarter of the year, a 1.4% increase compared with the same period in 2024.

The March reading confirms that, despite bouts of weakness in prior months, remittances remain an important support for the disposable income of millions of households. Still, the breakdown points to a stabilization phase: even as the total dollar amount rose, the number of transactions fell 3.6% year over year—suggesting growth is being driven more by a higher average transfer than by a rising number of payments.

In the quarter, the average remittance ran about $405 per transfer, consistent with the pattern seen in recent years: fewer transfers, but larger amounts. That trend is often tied both to shifting transfer costs and greater use of digital channels, as well as to strategies by Mexican workers in the United States (U.S.) to consolidate transfers amid higher labor-market or immigration uncertainty.

For the Mexican economy, remittances continue to act as a buffer for consumption, especially in regions highly dependent on these flows. At the macro level, they provide a steady source of foreign currency and help smooth shocks in the balance of payments; at the micro level, they support day-to-day spending and, to a lesser extent, household investment such as home improvements or small businesses. However, their ability to drive growth is limited unless they are accompanied by stronger formal job creation and higher domestic productivity.

U.S. Employment and the Exchange Rate: The Variables That Will Set the Tone

Looking ahead, the path of employment in the United States will be the main driver of remittance flows. If the U.S. labor market cools—due to higher financing costs, weaker investment, or slowing consumption—migrants’ incomes could come under pressure, reducing their ability to send money home. At the same time, the exchange rate plays a key role in the purchasing power of receiving families: a stronger peso means fewer pesos per dollar sent, which can either encourage larger transfers in USD to offset the effect, or limit the boost to consumption if the amount sent does not increase.

Beyond employment and the exchange rate, the immigration environment and enforcement at the border also shape the stability of these flows. Changes in labor policies, workplace raids, or tighter restrictions can affect both the job placement of new migrants and the continuity of employment for those already working, increasing volatility. In this context, market analysts have warned that since mid-2024, a trend of weaker momentum has emerged and could deepen if conditions in the U.S. deteriorate.

On the domestic front, remittances are reaching an economy that has remained resilient in consumption but still faces challenges: interest rates remain high, fiscal support is weaker than in years of heavy public spending, and activity signals are mixed. In that environment, dollar inflows via remittances continue to be a pillar for certain local economies, though the more moderate pace suggests they will no longer provide the same “tailwind” seen during the years of record highs.

In perspective, March’s data offer some relief, but not necessarily a shift in trend: quarterly growth was limited, and the lower number of transactions points to normalization. Remittance performance in the coming months will depend on whether the U.S. labor market continues to support Mexican workers’ incomes, and how that outlook interacts with the exchange rate and the immigration climate.

All in all, Mexico posted a meaningful month-over-month rebound in remittances, but the quarterly balance shows moderate gains and signs of stabilization; keeping an eye on U.S. employment, the dollar, and immigration conditions will be key to anticipating how the rest of the year unfolds.