• Remittances to Latin America and the Caribbean reached a new record in 2025, driven by strong growth in most subregions, with Mexico as the main exception.
• In 2026, remittances continue to grow, but at a more moderate pace as the exceptional conditions behind last year’s increase begin to ease.
• The outlook for the rest of the year will depend largely on migrant labor market participation in the United States and exchange rate dynamics across the region.
Remittances to Latin America and the Caribbean (LAC) reached a record $173.7 billion in 2025, marking a 7.3% increase over 2024, according to Inter-American Development Bank (IDB) estimates based on official data from central banks and statistical offices (see Box 1). Preliminary 2026 figures suggest that growth is continuing, though more gradually.
Much of the 2025 increase reflected migrants' exceptional response to policy uncertainty: extra transfers funded by savings, longer hours, and heightened concern for households back home. In 2026 the room for that kind of growth has narrowed. Savings have been drawn down by recent transfers, the hours worked by those still employed cannot rise indefinitely, and the expanding female labor force in the United States has not fully offset the decline in male workers.
Box 1. Remmittances Data Sources
The 2026 data presented here are based on official remittance flow data reported by 14 countries in the first quarter and estimates for the remaining nine countries. The countries with up-to-date first-quarter data are Bolivia*, Brazil*, Chile, Colombia*, El Salvador*, Guatemala*, Haiti, Honduras*, Jamaica, Mexico*, Paraguay, Peru, the Dominican Republic*, and Suriname, which together account for 89% of total remittance flows to the region.
In-house estimates were used for countries that have not yet released official first-quarter data (Argentina, Guyana, Uruguay, Ecuador, Belize, Costa Rica, Nicaragua, Panama, and Trinidad and Tobago), based on historical data series and correlations with other countries in the region.
* Data are available through April 2026.
2025 Figures Confirmed the IDB’s November Forecast
In November 2025, using data through August, the IDB projected that the region would reach $174.4 billion by year-end. The final figure of $173.7 billion came in 0.4% below that forecast. Growth was far from uniform, with sharp contrasts across countries and subregions.
Central America was the main driver, with remittances up 20.1% to $55.5 billion. Honduras led at 27.1%, followed by Panama (20.0%), Costa Rica (19.6%), Guatemala (18.7%), Nicaragua (18.2%), and El Salvador (17.8%). Belize recorded the lowest increase, 1.9%.
The Caribbean grew 10.8%, 1.6 percentage points above the November forecast. Haiti rose 22.2%, exceeding earlier projections partly because of a revision to its central bank's data series. The Dominican Republic, the subregion's leading recipient, grew 9.3% after receiving $11.9 billion. Jamaica and Trinidad and Tobago saw more modest gains, 3.8% and 3.1%.
South America grew 9.7% to $35.3 billion. Paraguay posted the largest increase, 34.3%, a figure that also reflects a central bank revision, followed by Ecuador (18.2%) and Colombia (10.6%). Transfers to Argentina fell 13.4% against 2024, while Brazil and Bolivia both ended the year down 0.5%.
Mexico stood out for two reasons. It is the largest recipient in the Americas and the second largest worldwide after India, and it bucked the regional trend: its $62.5 billion in 2025 was a 3.9% decline from 2024. The November report tied the contraction to comparisons with the high 2024 base, when exchange-rate swings encouraged extraordinary transfers; a decline in the Mexican labor force in the United States; and changes in the composition of that labor force. Mexico still accounted for 36% of the region's total inflows in 2025.
The First Few Months of 2026 Point to a Change of Pace
Data for the 23 countries in this analysis show an overall slowdown relative to 2025. So far there is no sign of a significant impact from the 1% tax on certain remittances from the United States that took effect on January 1, 2026. First-quarter growth of 5.7% keeps flows rising, but more slowly than last year and below the average rate of the past decade.
Table 1. Remittances to Latin America and the Caribbean, by subregion
Millions of US dollars and growth rates
| Subregion | Q1 2025 | Q1 2026 | Q1 2025–Q1 2026 growth rate |
| South America | 8,221.7 | 8,686.4 | 5.7% |
| Central America | 12,422.2 | 13,553.4 | 9.1% |
| Caribbean | 4,934.9 | 5,225.6 | 5.9% |
| Mexico | 14,379.5 | 14,753.3 | 2.6% |
| LAC | 39,958.2 | 42,230.7 | 5.7% |
Source: Authors’ calculations based on data from central banks, statistical offices, and IDB estimates.
Mexico Is Recovering Slowly
Through April 2026, remittances to Mexico have grown 2.6%. The turn from the 3.9% decline of 2025 is significant, but growth stays modest against both Mexico's historic performance and the 5.7% for the region as a whole.
The recovery suggests Mexico's path cannot be explained by base effects from the exceptional 2024 levels alone; it also reflects lower participation by Mexican workers in the U.S. labor force, partly offset by a stronger peso that has encouraged transfers to households that continue to depend on them. Despite its size, Mexico is not causing the regional total to fall, but will depress aggregate growth rates in 2026.
Central America Leads Growth
Central America continues to grow faster than any other subregion. Its 9.1% increase in the first quarter of 2026 remains high relative to the rest of the region, though well below the 20.1% of 2025, when flows were driven by short-term factors such as the use of savings that are now beginning to be exhausted. Honduras leads with 14.4%. Guatemala, which receives the largest volume, grew 8.0%; Panama, 10.6%; Costa Rica, 10.4%; Nicaragua, 7.5%; El Salvador, 6.8%; and Belize, 1.0%. The subregion will keep supporting regional growth in 2026, more modestly.
South America Shows Both Recoveries and Ongoing Declines
South America posted aggregate growth of 5.7% in the first quarter of 2026, below the 9.7% of 2025, though the slowdown was less pronounced than Central America's. The clearest change was Brazil: after ending 2025 with a slight decline, it has emerged as the regional frontrunner, up 11.0%. Growth also reached Guyana (9.2%), Ecuador (7.5%), Uruguay (5.3%), Colombia (5.1%), Peru (4.3%), and Paraguay (3.2%), while Chile rose just 0.1%. Argentina and Bolivia fell 8.8% and 0.3%, respectively.
In Argentina, the stabilization of the foreign exchange market and the elimination of the gap between the official and parallel rates reduced incentives to send beyond fixed household expenses; in Bolivia, exchange-rate uncertainty continues to affect the dollar value of flows. The subregion shows no clear pattern, and its transition from the 2025 surge to the moderation expected in 2026 looks more gradual than elsewhere.
Remittances to the Caribbean Slowed, with the Notable Exception of Haiti
The Caribbean recorded year-on-year growth of 5.9% in the first quarter of 2026, well below the 10.8% of 2025. Haiti again led the subregion at 12.0%. The Dominican Republic, which receives the largest flows, grew 4.2%; Jamaica, 4.1%; and Trinidad and Tobago, 2.1%. The trend remains positive but with less momentum, carried largely by Haiti's performance and by stable flows to other Caribbean countries.
The Migrant Labor Force in the United States and Prospects for the Rest of the Year
In the early months of 2026, changes migrants’ participation in the U.S. labor market help explain the shift toward lower remittance growth rates than in previous years.
According to the US Census Bureau's Current Population Survey, the average size of the Mexican migrant labor force in the United States fell by 730,000 workers in the first four months of 2026 compared to the same period in 2025, losing about 710,000 men and 20,000 women. By contrast, the labor force from other countries in the region expanded by roughly 360,000 over the same period, most among women: about 280,000, against 80,000 men. Countries whose diasporas held or expanded their U.S. participation have continued to post high remittance growth.
Even so, flows do not follow migrant employment automatically. Despite the smaller Mexican workforce and only a moderate increase from the rest of the region, remittances keep rising, partly because the appreciation of several Latin American currencies against the dollar reduces what households receive in local currency, prompting migrants to send more to protect that purchasing power.
Migrant employment and exchange rates are therefore the two main factors shaping flows over the rest of the year. As Mexico shows, specific shifts in the origin or gender composition of the labor force can produce very different outcomes, and an exchange-rate episode that lifts flows one year can create base effects the next.
With the dollar weak, the Mexican peso up 15% and 10 of 13 other countries with flexible exchange-rate regimes seeing their currencies appreciate since January 2025, migrants tend to increase the dollar value of their remittances to preserve local purchasing power. If the dollar stabilizes, that effect could fade, leaving labor force contraction as the main factor and slowing growth further.
The baseline for 2026 combines growth and moderation. Remittances to Latin America and the Caribbean will continue to grow and will likely set another record, but there is less scope to repeat the 2025 surge: savings-financed transfers matter less and extra hours have their limits, so the size of the migrant labor force is again emerging as the main driver. The new record should be read with caution.
Decreasing rates of growth do not reduce what remittances mean for millions of households across the region, but the room for further acceleration now appears limited.