Remittances sent for investment purposes in El Salvador have grown by 358% over the past six years, although they still represent a small portion of the total remittances received, according to the Central Reserve Bank (BCR).
Of the $8,479.7 million received in remittances by the end of 2024, only 1.3% — equivalent to $114.2 million — were classified as investment remittances. This marks an increase of $8.9 million, or 8.5%, compared to the $105.3 million reported in 2023. The remaining 98.7%, totaling $8,365.5 million, were remittances used for consumption, which grew by 2.4% year-on-year.
The BCR notes that remittances reach 26.8% of Salvadoran households and are generally categorized as either consumption or investment. The former includes expenses such as food, healthcare, and utility bills, while the latter refers to capital aimed at acquiring assets like businesses or housing.
“Investment remittances have gained strength over the past three years,” the BCR stated, pointing to an upward trend from $54.9 million in 2021 to $72.6 million in 2022 — a 32.2% increase — and then to $105.3 million in 2023, representing a 45% rise.
Before the COVID-19 pandemic, investment remittances amounted to only $24.9 million in 2019, just 0.7% of the total remittances, compared to 99.3% destined for consumption.
The BCR explained that investment remittances typically involve transfers of $5,000 or more, for which Salvadorans abroad are required to fill out a formal declaration. By the end of 2024, 74.9% of all family remittances were for amounts under $499, while transfers between $500 and $999 made up 9.2%, and those from $1,000 to $4,999 accounted for 6.1%. Transfers between $5,000 and $10,000 represented the remaining 9.8%.