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Mexico Remittances Plunge as Trump Cracks Down on Migrants - BLOOMBERG
(Bloomberg) -- Remittances sent to Mexico fell 12% in April from a year prior, registering the largest annual drop in more than a decade as US lawmakers mull taxing the transfers and Donald Trump’s administration toughens its rhetoric against migrants.
Central bank data released Monday showed that remittances received by Mexico fell to $4.76 billion in April, well below the median estimate in a Bloomberg survey and down from $5.42 billion in the same month in 2024. In March, remittances reached $5.14 billion.
The annual decline is the largest since September 2012 and is likely attributable to a deteriorating US labor market and increasing fears of deportation among immigrants in the workforce, said Gabriela Siller, director of economic analysis at Grupo Financiero Base.
“This was due to the fact that migrants in the United States are afraid to go out to work and send remittances because they could be deported,” she said.
A prolonged plunge could impact consumption and growth in Latin America’s second-largest economy, which depends heavily on transfers from the US, Siller added.
Mexico received nearly $65 billion in remittances in 2024, representing about 3.5% of gross domestic product, Finance Minister Edgar Amador said during a press conference last month. In the first quarter, 97% of its remittances came from the US, according to central bank data.
Mexico’s economy narrowly avoided entering a recession during the first three months of 2025, and the central bank reduced its growth estimate for the year to 0.1%, from 0.6% previously, in a quarterly inflation report released last week.
US lawmakers are currently considering a 3.5% levy on remittances sent out of the country by non-citizens, an idea Mexican President Claudia Sheinbaum’s government has rejected as double taxation.
Changes to the US labor market and wages for low-skilled workers pose key risks to remittances going forward, Alberto Ramos, chief Latin America economist at Goldman Sachs Group Inc., said in a note to clients.
“The tightening of US immigration policies, and measures to reduce the flow of illicit drugs and money laundering may also impact the flow of remittances to Mexico,” he said.
