Household consumption remains the main support of economic activity in Central America, with remittances serving as a source of liquidity for Guatemala and El Salvador and a flow that, despite moderating its growth, retains weight in spending, credit, and investment decisions.
During a meeting organized by Grupo Cibest, the director of Economic, Sectoral, and Market Research, Laura Clavijo, stated that the region is going through a stage of macroeconomic stabilization, although it faces external pressures from rising fuel prices, inflation, and international interest rates.
"Central America has managed to capitalize on macroeconomic stability, investment, and results in economic growth, also driven by what households have been demanding," said Clavijo. Her analysis included Panama, Guatemala, and El Salvador, economies for which she expects continued dynamism through 2027.
In Guatemala, the impact of remittances extends to services, commerce, and financial intermediation. Carlos Ortiz, head of Business Intelligence at BAM, noted that private consumption maintains sustained behavior supported by the transfers sent from the United States.
"Private consumption in the country is highly boosted, especially by the flow of remittances we receive, mainly from the United States," said Ortiz.
He added that these resources even exceed export revenues…
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Household consumption driven by remittances remains the main support of economic activity in Central America. Household consumption continues to be the main pillar of economic activity in Central America, with remittances serving as a source of liquidity for Guatemala and El Salvador and a flow that, despite moderating its growth, still carries weight in spending, credit, and investment decisions. During a meeting organized by Grupo Cibest, the director of Economic, Sectoral, and Market Research, Laura Clavijo, argued that the region is going through a stage of macroeconomic stabilization, although it faces external pressures from rising fuel prices, inflation, and international interest rates.
"Central America has managed to capitalize on macroeconomic stability, investment, and results in economic growth, also driven by what households continue to demand," said Clavijo. Her analysis included Panama, Guatemala, and El Salvador, economies for which she expects continued dynamism through 2027.
In Guatemala, the impact of remittances extends to services, commerce, and financial intermediation. Carlos Ortiz, head of Business Intelligence at BAM, noted that private consumption maintains sustained behavior thanks to the transfers sent from the United States.
The region is experiencing a stage of macroeconomic stabilization amid inflationary pressures and rising fuel costs. /(Illustrative image Infobae)
"Private consumption in the country is highly boosted, especially by the flow of remittances we receive, mainly from the United States," said Ortiz. He added that these resources even exceed export revenues, making them a central component of the Guatemalan economy.
The executive identified services and consumption as the activities with the greatest expansion in recent years. He also mentioned manufacturing and tourism, which maintain high demand from both foreign visitors and local consumers.
That expansion benefits the banking system. According to Ortiz, financial and insurance activities could grow 8.1% in Guatemala during 2027, according to the sectoral projections cited during the conference. The figure reflects greater demand for financing from companies and families, in a context where credit accompanies commercial activity.
The situation in El Salvador presents a similar dynamic. Although remittances are no longer growing at the pace of the extraordinary records of 2025, the flows remain at high levels and continue to drive domestic consumption.
According to the speakers, manufacturing and tourism maintain high demand from both foreign visitors and local consumers. /(Turismo Antigua)
A representative of Banco Agrícola indicated that transfers "continue growing around 4%, a bit more," compared to historical bases of double-digit increases. He also highlighted that bank deposits exceed the total balance of the credit portfolio by more than USD 3 billion, a sign of liquidity within the financial system. That availability of resources makes it possible to sustain the supply of loans for households and companies.
"We can meet the demand for credit for investment and consumption that companies and households are experiencing," he said during the question-and-answer session.
Clavijo indicated that Grupo Cibest's economic team raised its growth projection for El Salvador to 4% in 2026, after observing greater resilience of activity during the year. Consumption, remittances, and credit availability explain part of that revision.
The economist warned, however, that dependence on remittances constitutes a vulnerability for Central American economies. The flows are not showing the same expansion as in previous years, and normalization could affect the pace of household spending. High energy costs and financial conditions force the region to diversify its sources of growth. /(Illustrative image Infobae)
"Countries in Latin America face the great challenge of diversifying their sources of growth," Clavijo stated. The need, she explained, is to reduce exposure to commodity cycles or to external income such as remittances. The challenge becomes more relevant in a global environment marked by higher energy costs and restrictive financial conditions. An increase in rates can make credit for housing, vehicles, and durable goods more expensive, with a direct impact on families.