Guatemala: Annual growth in remittances picks up at the close of Q2
Remittances from workers abroad grew 10.8% over the same month a year ago in June, picking up speed from the previous month’s 8.2% growth. In USD terms, the total value of remittances equaled 801.4 million, slightly below May’s record but still a sign that Guatemalan workers in the United States continue to benefit from the strong momentum in the U.S. economy.
The 12-month moving sum of remittances was stable at USD 8.5 billion in June, remaining at an all-time high. However, growth in the 12-month moving sum of remittances eased again in June to 10.9%, down from the May’s 11.5%.
Remittances are a key source of growth in Guatemala, contributing to more than a tenth of the country’s GDP. Given the large majority of remittances originate in the United States, they tend to follow U.S. employment trends. As the unemployment rate in the United States neared a two-decade low, remittances in the first six months of the year consequently grew robustly over the same period in the previous year. Considering the U.S. economy is likely to moderate in the second half of the year, this could see growth in remittances ebb slightly from the stellar performance in the first half of the year. Moreover, uncertainty regarding tighter immigration policy remains a downside risk to remittances.