This report identifies current migration- and remittance-related trends in Central America (specifically the CA-4: Guatemala, El Salvador, Honduras, and Nicaragua), notes a decline in the latter, and offers risk-mitigation and development solutions through recommendations for Central America to address changes in family remittance flows.
Key Findings:
- Person-to-person transactions are declining due to lower migration and increased deportations. This has amounted to at least 500,000 fewer transactions since 2025, or 8% of all remittance recipient households in 2026.
- Remittance dynamism is slowing, with growth from 19% in 2025, 7% in 2026, and under 3% in 2027; next year, the region is expected to receive $4 billion less in remittances.
- The intention to migrate is persistent and is expressed by 10% of households in the region wanting to migrate.
- The impact of migrant return and slowed migration increases the size of the labor force in the region, adding pressure to the labor market.
Recommendations:
The solutions proposed by this report involves introducing incentives for saving, investment, and credit in communities of origin, increasing wealth and creating opportunities for improved quality of life for all, including those who return to their places of origin. The proposed strategy is based on three operational pillars and focuses on five beneficiaries. It emphasizes partnerships with the financial sector and government agencies.
