Remittances will continue to be a key driver for several Central American economies despite a major US-led investment drive, political analyst Eduardo Núñez told BNamericas.

This week, the White House announced that the Northern Triangle – Guatemala, Honduras and El Salvador – would receive $950 million in investment as part of efforts to curb migration to the United States.

The investment comes from the Alliance for Central America, led by US Vice President Kamala Harris. Launched in 2021, the initiative aims to tackle the root causes of migration by creating economic opportunities in Central America.

Several million migrants from Guatemala, Honduras and El Salvador live legally or illegally in the United States and send their families billions of dollars every year, says Núñez.

This money represents between 18% and 26% of the GDP of these countries, which is why it is “their main economic activity”, he added.

Through migration, large remittances have generated a dependency between the United States and Central America that cannot be broken.

According to central bank figures, remittances sent to Guatemala, Honduras and El Salvador in 2022 amounted to $18.040 million, $8.686 million and $7.742 million, respectively.

After rising 9.3% last year, the World Bank projects that remittances to Latin America and the Caribbean will increase by 4.7% in 2024 due to the expected economic slowdown in the United States, where live the vast majority of Latin American migrants.

Central American economies are among the most dependent on remittances in Latin America and the Caribbean and could be affected this year if there is a significant reduction in remittances.

About 50 companies from the United States and other countries participate in the Alliance for Central America, which has so far announced investments of $4.2 billion.