Guatemala: Remittances reach a record high in July
The pace of growth in remittances from workers abroad more than doubled at the start of the third quarter. In July, remittances grew a whopping 23.2% over the same month a year ago, marking the quickest pace of expansion in a year and accelerating from June’s 10.8% expansion. In USD terms, the total value of remittances equaled USD 818.3 million, setting a new record and suggesting that Guatemalan workers in the United States continue to benefit from the robust momentum in the U.S. economy.
The 12-month moving sum of remittances picked up from USD 8.5 billion in June to USD 8.7 billion in July, a new all-time high. In addition, growth in the 12-month moving sum of remittances sped up to 11.1% in July, from June’s 10.9%.
More than a tenth of Guatemala’s GDP derives from remittances, which tend to follow employment trends in the United States, where most remittances originate. In July, the unemployment rate in the United States dipped following a brief bump in June and is hovering near a multi-decade low. Following the second quarter’s stellar performance, the U.S. economy is expected to continue growing strongly in the quarters ahead, albeit at a more moderate pace. As a result, growth in remittances is likely to remain robust going forward. However, lingering uncertainty over immigration policies in the United States remains a downside risk to remittances.