Macroeconomic Forecast El Salvador

July 2008 | Macroeconomic Forecasts

Workers remittance inflows totalled US$1.94bn in the first six months of 2008, a 6.6% y-o-y rise from the previous year. While down from the double-digit rate seen in recent years, the figures come as a welcome surprise, as remittance flows across other Central America states have shown signs of considerable weakness. We caution, however, that with the US construction sector still nowhere near mounting a recovery, remittance growth could yet flatten out in H208, which could weigh on our full-year current account projection of a 5.6% deficit this year.

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