Guatemala: Growth in remittances moderates markedly in September but stays solid
October 8, 2018
Growth in remittances from workers abroad decelerated significantly from 21.6% year-on-year in August to a still-robust 10.9% in September. In USD value terms, remittances totaled USD 746.0 million in September, down from August’s all-time high of USD 860.4 million. Over the third quarter as a whole, remittances have surged year-on-year, boding well for private consumption.
The 12-month moving sum of remittances increased from USD 8.8 billion in August to USD 8.9 billion in September, a new all-time high. Growth in the 12-month moving sum was stable at 11.7% in September.
Over ten percent of Guatemala’s GDP derives from remittances, which tend to follow employment trends in the United States—where most remittance originate. With still-robust, albeit more moderate, growth expected in the U.S. economy over the forecast horizon, remittances should continue to increase healthily. However, uncertainty over U.S. immigration policy remains a downside risk to remittances growth.
Guatemala Private Consumption Forecast
FocusEconomics Consensus Forecast participants see private consumption expanding 3.3% in 2018, which is unchanged from last month’s forecast. For 2019, our panelists expect private consumption to increase 3.5%, down 0.1 percentage points from last month’s estimate.
Author: Jan Lammersen, Economist