Macroeconomic Forecast El Salvador

Remittances into El Salvador have started to pick up again, after contracting in 2009 following a slowdown in growth. Data from the central bank for May showed an increase of 4.4% in year-on-year terms. Workers remittances are an integral component of El Salvador's balance of payments accounts, accounting for US$3.43bn of foreign currency earnings in 2010, and accordingly we are encouraged to see growth again in this component. That said, El Salvador remittances are highly dependent on the US economy, and a shaky recovery here could see remittances slow again.

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