Guatemala monetary authorities do not anticipate, in the short term, a contraction of family remittances; On the contrary, they will remain in positive growth, according to the established scenarios.
The noise generated by the possibility of implementing a tax on family remittances in the United States, and its potential effects on the national economy, is a theme that remains under follow -up.
During May, Guatemala has received US $ 93.8 million per day for transfers on average. In the same period last year, the amount was US $ 79.3 million. A Guatemalan migrant makes an average monthly shipment of US $ 879 (equivalent to Q6 thousand 768).
Subscriber content
The authorities of the Bank of Guatemala (Banguat) stated that, if the measure is approved and implemented in 2026, this could generate an impact of US $ 860 million, equivalent to 0.05% of the Gross Domestic Product (GDP).
Johny Gramajo Marroquín, economic manager of the Central Bank, ruled out that the supercycle of family remittance flows to Guatemala is coming to an end. On the contrary, he said they will remain within the developed models. He reiterated that the main effect of this measure would be of a social nature, especially for those whose only income in the home comes from remittances.
By 2026, the estimate of remittances is US $ 24 thousand 618.4 million, with 5% projected growth as a central value.
How to understand the conceptualization of remittance tax?
It is a proposal included in a broader package of laws of a fiscal nature, which includes the extension of tax cuts of 2017, modifications to the Medicaid Program (Federal Health Insurance) and, indirectly, income from tariffs and taxes on remittances.
Subscriber content
Originally, a 5% tax on remittances was proposed, but subsequently reduced to 3.5%. The legislative process requires its approval both in the House of Representatives and in the Senate. In the lower house, the vote was very closed, and went through a single vote. In the Senate, the panorama is uncertain, not so much for the tax itself, but by the other fiscal measures included in the package, which would imply a fiscal expansion. These do not have the support of the Democrats and generate discrepancies even within the Republican Party.
What would be the first impact?
If the 3.5% tax is approved and there is no way to be absorbed by compatriots in the United States, the macroeconomic analysis suggests an impact on the flow of family remittances as of January 1, 2026, when the law would enter into force.
A reduction of US $ 860 million is projected in family remittances. Although the base scenario of a 5% growth in 2026 is maintained, this tax could reduce this rate, although it would remain positive, located between 1.5% and 3%.
“The social and microeconomic effect would be considerable for two reasons: the first, because international organizations have documented that about 30% of remittance beneficiaries depend exclusively on them to cover their basic needs. The second, because a reduction in the amounts sent would directly affect the income of those homes,”
In macroeconomic terms, the impact would be mild: a 3.9% economic growth projection would be passed to one of 3.85%, that is, an impact of 0.05% of GDP.
Why is a more social than macroeconomic impact considered?
Although the macroeconomic impact would not be significant, the social and microeconomic effect would be considerable for two reasons: the first, because international organizations have documented that about 30% of the remittance beneficiaries depend exclusively on them to cover their basic needs. The second, because a reduction in the amounts sent would directly affect the income of those homes.
What scenarios have been studied?
The first scenario, considered base, contemplates the solidarity of the migrants, who would assume the cost of the tax without modifying the amount sent. In that case, there would be no changes in the expected flows.
The second scenario considers that families would compensate for the reduction using part of their savings or investment, which represents approximately 15% of income, according to the International Migration Organization (IIM). This would imply postponing or canceling house improvements to cover the deficit generated.
The third scenario, the most adverse, occurs if the migrant stops sending remittances and the beneficiary in Guatemala cannot compensate for the impact, which would generate a reduction of US $ 860 million. Despite this, a positive variation is projected, although less than the one planned.
Subscriber content
Are there risks of falling into that worst scenario?
Therefore, although the forecast of an increase of 5% by 2026 is maintained, it is estimated that, with the tax, the growth would be 1.5%. It is important to underline that a contraction in remittances is not anticipated, but a slowdown in its growth rate.
Are we facing the start of the remittance cycle?
Answering that question is complex, as multiple factors intervene. In addition to the tax, the evolution of net migration influences. Until 2024, this has been positive, that is, more Guatemalans enter the US of those who leave. If border controls are maintained and slowed up to 90% of crossing attempts, we could see a negative net migration, which would imply a reduction in the number of people capable of sending remittances.
Currently, it is estimated that there are about three million Guatemalans in the US, of which 2.1 million send remittances, according to the IOM.
Subscriber content
What would this imply?
It would mean that this number of people would stop increasing, and remittances would come from a group that no longer grows. In that context, what is anticipated is not a reduction, but a slowdown in flows.
What has been analyzed on the economic level?
The sending of remittances depends, in large part, on the working conditions of migrants in the US. This situation maintains high wages, especially in the services sector, where an important part of migrants is concentrated.
The central scenario states that remittance income will remain high. A change in this projection would be given only if adverse conditions occur in the US, as a strong economic slowdown that affects the employment and income of Guatemalan migrants.
Would it be a combination of factors?
The “perfect storm” would be the combination of three factors: the implementation of the tax, a negative net migration and a strong deceleration of the US economy. Only in that adverse scenario a decrease in remittances could be observed.
However, the base scenario provides that the US economy.