Mexico | Remittances grow 10.6%. Will they face risks for 2025?

President-elect Trump has threatened mass deportations and greater border securitization, which could affect remittances to Mexico and LAC. However, it is a very unlikely scenario because it would affect the U.S. economy that depends on migrant labor force and increase inflation in that country.

Key points

• Key points:
• In November 2024, 5,435 million entered Mexico through family remittances, an increase of 10.6% compared to the same month in 2023.
• Eight years ago, President Trump's electoral victory for the first term generated a 25.8% increase in remittances in November 2016, explained by the "Trump Effect", due to threats of mass deportation and a possible tax on remittances. In November 2024, after his victory at the polls for a second term, it is not evident that this effect on remittances to Mexico exists.
• The World Bank estimated that in 2024 remittances worldwide reached 905 billion dollars, which is an increase of 4.5% at an annual rate, higher than the growth recorded of 2.5% in 2023.
• Latin America and the Caribbean have many countries highly dependent on remittances, and much of this flow comes from the United States. Remittances as a proportion of GDP in 2024 are very high in Nicaragua (27.2%), Honduras (25.2%), El Salvador (23.5%), Guatemala (19.6%), Haiti (18.7%) and Jamaica (17.9%). In Mexico, remittances represented 3.4% of the national GDP in 2024.
• A massive deportation of migrants as threatened by President-elect Trump could affect the flow of remittances to Latin America and the Caribbean. However, it is a very unlikely scenario because it would affect the US economy, which depends on the migrant workforce, and would increase inflation in that country, especially in food production, manufacturing, and preparation.

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