Guatemala: Growth in remittances slows to five-month low in July
Remittances totaled USD 1,354.3 million in July, expanding 25.5% year-on-year (June: +41.4% yoy) amid the fading effect of the pandemic. In the 12 months up to July, remittances reached USD 13.7 billion, up from June’s USD 13.4 billion. The 12-month rolling sum marked a 29.4% increase from a year prior (June: 28.3% yoy).
Remittances are a key source of income for Guatemalan families and tend to follow employment trends in the United States, where the majority of remittance payments originate from. As such, the expected recovery in the U.S. amid vast government stimulus should boost remittances inflows and support the Guatemalan economy.
Analysts at the EIU added:
“Guatemala is experiencing a solid V-shaped recovery, buoyed by record inflows of workers’ remittances from abroad. […] However, the recovery has so far been uneven, supported by private consumption (amid high inflows of remittances) on the demand side, and by the fast reopening of industry on the supply side. The services sector continues to lag, although we anticipate a firmer recovery in activity in the second half of 2021 and in 2022.