El Salvador receives 15% of remittances to Central America

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By LatAm Reports Editorial Team

El Salvador received $8,181.8 million through remittances in 2023.

El Salvador received 15.6 percent of remittances that arrived in Central America in 2023, confirmed data from the Executive Secretariat of the Central American Monetary Council (Secmca).

The information, shared at the macroeconomic news conference in the Central American and Dominican Republic region – carried out last week – points out that in 2023 the region received $52.598.5 million in remittances.

Of this portion, $8,181.8 million were destined for Salvadoran households, or $15 out of every $100 they arrived in the region.

The country that received the largest amount of remittances was Guatemala with $19.804 million, this figure covered 37.7 percent of the total that entered Central America.

The analysis does not include Panama, but adds to the Dominican Republic. The latter earned $10,157.2 million through remittances, 19.3 percent of what the entire region received. In the same vein, Honduras obtained 17.4 per cent, Nicaragua 8.9 per cent and Costa Rica 1.2 per cent.

The region received more than $52 billion in family remittances in 2023, an increase of 9.1 percent, is an additional $4 billion compared to 2022, said the executive secretary of the Central American Monetary Council (CMCA), Odalis Francisco Marte Alevante.

Mars Alevante explained that when the data are analyzed in its representative percentage before the Gross Domestic Product (GDP) of each nation, it is evident that Nicaragua has a higher representation of remittances, with 26.8 percent.

In this country (Nicaragua), remittances have more than doubled in recent years, said the CMCA spokesman.

Remittances represent 26.6 per cent of GDP in the Honduran economy, while for El Salvador it amounts to 23.5 per cent and for Guatemala 18.7 per cent.

The smallest portions are covered by the Dominican Republic with 8.3 % representing GDP and Costa Rica with 0.7%. The CMCA said it is linked to the low levels of migration reported by the Central American neighbor.
Household consumption and maintenance.

The Central Reserve Bank (BCR) noted that $9 out of every $10 that enters El Salvador in family remittances was used for consumption in 2023.

Within this route, the money could be used to support the home, special occasions or medical expenses.

Although remittances in El Salvador grew by 4.6 % in 2023, the data were not positive in the first month of 2024, when a decrease of 0.4% was reported compared to the same period last year, and $594.1 million was counted.

The United States remains this year as the main issuer of remittances for Salvadoran families, with 92.1 percent of the money counted.

Despite the fall, Inter-American Diálogo points out that remittances could grow by up to 3.2 percent in 2024 and exceed $8.347 million.

This article has been translated from the original which first appeared in Diario El Mundo