Remittances to El Salvador in the second quarter reached US$2.74bn, up US$92.3mn or 3.5% from the same period 2018, according to the central bank.
Remittances in June were US$463mn compared with US$461mn in the same month last year – a reflection of the broader deceleration in remittance growth seen in El Salvador and also in Mexico and elsewhere in Central America over the last year.
The year-on-year growth rate in June 2018 was 11.2%, for example, and 9.3% in the first half of last year, according to central bank data.
The bank reported that remittance companies processed 57.8% of the total in the second quarter 2019, or US$1.59bn and 6.2mn transactions, while banking institutions handled 40.1% of remittances or US$1.10bn and 3.9mn transactions. Cash remittances were US$45.4mn, or 1.7% of the total.
The US labor market has been the key driver of surging remittances in recent years. The US bureau of labor statistics reported that the Hispanic unemployment rate increased to 4.3% in June from the record low of 4.2% in May and April, but was down from 4.6% in June 2018. The full US unemployment rate stood at 3.7% in June, up from 3.6% in May but down from 4.0% in June 2018.
Remittance growth to other key Central American nations and Mexico continues to be stronger than in El Salvador.
Data for the first half of 2019 from central banks indicates 12% year-on-year growth in Guatemala to US$4.93bn and 9.1% in Honduras to US$2.57bn. Meanwhile, Nicaragua saw US$518mn in remittances from January to May, up 7.5%.