By: Staff Writer
November 20, 2025
The Inter-American Development Bank in their latest report on Remittances to Latin America and the Caribbean in 2025, said that remittances are forecasted to hit record numbers in 2025, showing resilience in LAC in the global economy.
The report said: “During 2022 and 2023, remittance flows continued to grow (10.9 percent and 7.3 percent, respectively). They recovered pre-pandemic trend values and further strengthened their role as a key component of the region’s economies. In 2023, growth was mainly driven by increases in Central America (13.2 percent, with Nicaragua standing out), Mexico (9.8 percent), and South America (7.9 percent, mainly in Argentina and Paraguay), with more modest growth in the Caribbean (2.6 percent, mostly Trinidad and Tobago).
“However, in 2024, growth slowed to just 6.0 percent, the smallest increase in nearly a decade. This slower pace is largely explained by minimal growth in remittances received by Mexico (only 2.3 percent) and moderate growth in Central America (7.5 percent).”
The report continued: “For 2025, the data reflect mixed trends: on one hand, a 4.5 percent decrease in remittances to Mexico, which remains the region’s main recipient with 35.4 percent of the total; on the other hand, significant growth in Central America, averaging 20.4 percent, mainly driven by Honduras, Guatemala, Nicaragua, and El Salvador.”
Mexico’s decline in remittances is directly correlated to the harsher US immigration policy that has seen a dramatic decline in migrant flows from Mexico to the mainland US. Changes in the Mexican peso exchange rate might also have influenced the size of these transfers. “However, we estimate that the decline in remittances received by Mexico is mainly due to the so-called base effect,” the IDB said.
The report also said: “The response of migrants to some changes in the migration policies of host countries—along with discussions like the remittance tax in the US— partly explains the overall growth trend: initially, migrants used their savings to make extraordinary remittances (a 9.9 percent increase regionally in the first quarter), and in the third quarter, they increased working hours to generate higher income.
“For example, between April and July, Central American women in the US increased their participation in part-time work by 11.8 percent, and in full-time work by 2.3 percent. Such movements reflect migrants’ strategies in a changing environment and their perception of risks to their families in different countries, particularly those receiving significant remittances from the US.”