Guatemala: Growth in remittances eases slightly in August
Growth in remittances from workers abroad eased slightly in August from 23.2% year-on-year in July to 21.6%. In USD value terms the total value of remittances reached a new record of USD 860.4 million in August. This suggests that Guatemalan workers in the United States continue to benefit from robust economic momentum and that private consumption growth in Guatemala should be robust in the third quarter.
The 12-month moving average of remittances edged up from USD 8.7 billion in July to USD 8.8 billion in August, also setting a new all-time high. Furthermore, growth in the 12-month moving average accelerated to 11.7% in August from 11.1% in July.
Over a tenth of Guatemala’s GDP stems from remittances, which tend to follow employment trends in the United States where most remittances originate. The unemployment rate in the United States remained near a multi-decade low in August and the U.S. economy is expected to continue growing robustly in the quarters ahead, albeit at a more moderate pace. As a result, growth in remittances from workers abroad is likely to remain strong going forward. Uncertainty over immigration policies in the United States remains and poses a downside risk to remittances growth, however.