2 October 2026

Developments in September including falling remittances and the potential loss of TPS status for Salvadorans and Hondurans has seen experts caution about future inflows.

An Inter-American Dialogue study reported that El Salvador inflows of remittances are up 3.7% to US$5.92bn in the first seven months of the year but projections for 2026 see a fall from 19.3% growth in 2025 to 7.3% this year.

“In my opinion, the greater risk is not the 55,000 TPS beneficiaries, but rather the possibility that immigration enforcement policies could extend to the nearly 800,000 Hondurans [in the US] without legal status,” said economic analyst Alejandro Kaffati.

El Salvador’s [TPS] designation was set to expire on 9 September but the Department of Homeland Security (DHS) failed to publish its decision within the statutory timeframe. This is an extension by default rather than a substantive decision, so uncertainty persists, argues Kaffati. Automatically a six-month extension came into play but at least 177,000 Salvadorans face losing their migration status and work permits when it is reviewed.

Recent data from the US suggests that the amount of migrants arrested in the US has fallen by 50.2% this year. Figures from the International Organisation for Migration (IOM) state that detentions of those from the Northern Triangle have fallen to 21,741 from 43,686. If this trend continues, it points to slower consumption growth in 2027. Mexican authorities arrested 9,659 people between January and June this year, 59.5% less than the 23,875 arrests in the same period of 2025. This suggests fewer people attempting to migrate or traffickers learning alternative routes to avoid capture.

About 11,000 Salvadorans had been returned by August with an estimated 17,050 for the year. The first quarter showed a 90.2% increase of deportations year-on-year. Last week saw a new 400 person crowd attempt to cross through Guatemala and Mexico to reach the US.

“We are leaving the country because of the need we have; there is no work here in Honduras,” an unnamed migrant told reporters.

The Inter-American Dialogue study added that inflows are lower than previous years due to less migration, fewer new senders of remittances, slower growth in migrant incomes and higher deportations.  Guatemala was the largest recipient of remittances between January and July of last year with US$15,45bn or 53.1% of the total.

This will have a significant impact on household consumption and external accounts. Remittances account for 20-30% of the GDP of the Northern Triangle countries. Honduras relies the most on remittances at 30.1% of its GDP according to 2025 World Bank figures.

Should US migration policy and deportation operations ramp up, so the threat of more returnees than the 33,000 so far in Honduras remains. An estimated one million Hondurans live in the US with 200,000 having legal status or citizenship. The numbers are incomplete as by definition the informal worker does not legalise their status and the census data the US and Honduras has relies much on volunteer consul workers.

Despite the risks and increased enforcement of stricter migration policies, migrant trains persist. Although it could be a political stunt for the mid-terms in the US, it highlights the desperation ordinary Hondurans feel.

“We already know that the United States doesn’t want to receive migrants from any country, but we’re going to try,” added another member of the Honduran caravan to reporters.

So far in 2026, the United States and Mexico have deported more than 30,000 Honduran migrants.

“The message to the caravan is you will not be allowed into our country,” White House spokeswoman Lauren Bis told Newsweek. “Any illegal aliens who pay cartels to smuggle them in the United States should expect the same outcome: arrest, prosecution where appropriate, and immediate deportation.” 

The caravan now named “Fe y Esperanza,” or “Faith and Hope” has swelled to over 600 migrants by 28 September. It now includes Guatemalans, Salvadorans, Haitians and Ecuatorians as well as Hondurans.

Source: Central America Briefing | Vol 14, Issue 18

18 September 2026

El Salvador and Honduras citizens in the US stand to lose their Temporary Protection Status, with local authorities potentially tasked with deporting hundreds of thousands of migrants.

The knock on effect to both economies, especially in terms of remittance inflows are likely to be felt for decades. Currently remittances make up roughly 27% of Honduras’s GDP, with over US$8bn received so far this year and 24-26% of El Salvador’s GDP.

In a statement, Congressman Eugene Vindman said, “Forcing families to return to dangerous and unstable conditions is cruel and short-sighted.”

Vindman was reacting to protests in Washington by TPS holders, the congressman introduced a bill seeking to extend the scheme by 18 months. In July, eighty Democratic members of the US House of Representatives signed a letter urging Homeland Security Secretary Markwayne Mullin to extend the designation, a request that had received no formal response by the time the termination took effect.

El Salvador was the first country ever granted TPS, originally in 1990 following civil-war-era destruction and the designation had been renewed continuously since 2001 after a series of major earthquakes. Salvadorans previously protected by the scheme now face losing their work permits and being deported. More than 150,000 US citizen children have at least one Salvadoran relative with TPS.

In the case of El Salvador, over 170,000 citizens will face irregular migration status going forward. This is the single largest revocation of the TPS scheme since it was created in Congress. US authorities have remained silent on the subject but claim plans are in place to deal with the situation.

“We have not received any official notification from the Trump Administration about how much time it will give Salvadorans,” Dulce Guzmán, president of Alianza Américas told EFE.

In 2018, the Department of Homeland Security (DHS) ordered the cancellation of the TPS program which was halted by legal measures arguing it was discriminatory and racist. Since then the Supreme Court has decided that the President can revoke TPS measures.

In August, the DHS removed 350,000 Haitian TPS holder status and 2025 saw 600,000 Venezuelans suffer the same fate. Other countries affected include Afghanistan, Syria, Honduras and Nicaragua.

Despite a plea by Honduran President Nasry Asfura for an “orderly and clearly defined period of transition”, TPS was allowed to lapse for Honduran citizens in the US. A further grace period or extension has been ruled out.

Honduran Foreign Minister Mireya Agüero refused the claim this will lead to mass deportations or a severe impact on remittance. The minister refused to give a figure as to how many people this may affect, pointing out that the US and Honduran census are incomplete but over one million Hondurans live in the US. Of those, 200,000 are believed to have citizenship or regular immigration status.

To assist migrants, Honduran authorities have set up legal support, consular assistance and tax facilities. Returning migrants will not have to pay import tax on their goods, stated Agüero. Official figures place the number of returned migrants to Honduras at 33,000 this year.

In the case of El Salvador, the TPS holders now move into a six month evaluation period by the DHS. At the Secretary of DHS’s discretion they could announce a 12 or 18 month extension. If the Secretary decides to end the program, it must be published in the Federal Register.

However, critics claim that the measures adopted are not enough and that El Salvadoran and Honduran authorities are not ready for the return of such a volume of migrants. They are especially concerned with how this interacts with the State of Exception in El Salvador that has been in place since March 2022 and led to the arrest of over 90,000 people.

“I grew up with an American life, with American values, so why do they want to take us away?” said TPS holder Alma to EFE. “As a child, I didn’t have the opportunity to choose where to live my life,”

Source: Central America Briefing | Vol 14, Issue 17

04 September 2026

Guatemala’s central bank Banguat has raised growth projections for the year to 4.3%, partly due to investments made by multinationals. Coca-Cola, PepsiCo and Fogel have all announced recent expansions in the country, heading a total of US$224mn in new investment.

This would beat the growth estimates of most multilaterals in the region and continue a dynamic surge, thanks to mainly US investment and an increase in exports.

Presenting a report, “Economic Stability and Growth in Guatemala”, Banguat governor Álvaro González Ricci said, “The outlook for global economic growth remains positive, supported by the expansion of the manufacturing and services sectors, strong private consumption, dynamic investment in artificial intelligence-related technologies, and the recovery of global trade, despite an environment of greater uncertainty and downside risks, primarily due to the armed conflict in the Middle East,”

The range of the growth is between 3.3-5.3% and Banguat kept the benchmark interest rate unchanged at 3.50%. Annual inflation was reportedly 2.70% in July, comfortably within the official tolerance band according to Ricci.

There have been national protests over the cost of diesel fuel, which recently hit Q45 (US$5.89) a gallon and economic manager Johnny Gramajo identified the Strait of Hormuz crisis and broader Middle Eastern tensions as the cause for the price rises. Gramajo noted that West Texas Intermediate crude was up 43.21% since the end of 2025 at US$82.23 per barrel.

Remittance inflows have increased 5.6% year-on-year up to 20 August with US$16.91bn sent back to Guatemala. Combined with private-sector bank credit growth of nearly 7% there is a lot of investment potential in the system.

“The sectors showing the greatest dynamism are manufacturing, electricity, water and sanitation services, construction, vehicle sales and repair, accommodation and food services, and professional activities,” said Gramajo.

Exports rose 4,9% through June with construction (5.8% growth), utilities (5%) and hospitality (5.3%) cited as the most dynamic sectors.

Despite fuel price rises, Banguat can maintain investor confidence while monitoring inflationary pressures. The forecast would place Guatemala third in Central America for projected growth behind Nicaragua (4.5%) and Panama (4.4%).

“Despite the high level of external uncertainty, most short-term indicators of economic activity continue to show performance consistent with the projected annual GDP growth for 2026,” added Ricci.

Coca-Cola, PepsiCo and Fogel announced more than US$224mn in combined new investment and reinvestment within weeks of each other in mid-2026. Coca-Cola ABASA expanded and modernised its bottling plant in Río Hondo, Zacapa. Total investment in the plant has been over US$160mn since 2023. They added an additional 130,000 square metres of infrastructure across four new production lines for returnable glass and cans.

“The expansion of this plant marks a milestone for Coca-Cola ABASA in Guatemala. This investment of more than US$160 million allows us to quintuple our production capacity, incorporate state-of-the-art technology, and strengthen a strategic operation to supply the local and regional market. It is a long-term commitment to Guatemala’s growth and to the talent of its people,” said Rodrigo Anzola, President and Chief Operating Officer of the Coca-Cola Bottling System in Guatemala.

Coca-Cola now represents nearly 2% of national GDP according to Anzola and employs 790 people at the site.

“We are pleased to be here with you today, witnessing the expansion of this plant, which is tangible evidence of the economic growth that Guatemala is experiencing,” President Bernardo Arévalo said at the inauguration ceremony.

Separately, PepsiCo opened a US$14.5mn distribution centre in Quetzaltenango, also attended by Arévalo. Refrigeration manufacturer Fogel, in partnership with Hoshizaki invested US$50mn in a new plant in Villa Canales, This will double production capacity from 216,000 to 400,000 units a year and create 1,800 jobs. Fogel aims to distribute from Guatemala to Mexico and the US.

Source: Central America Briefing | Vol 14, Issue 16

24 July 2026

The El Salvador government is continuing to expand its Bitcoin holdings despite warnings from the International Monetary Fund that it could imperil its US$1.4bn programme with the multilateral.

The National Bitcoin Office stated that the reserve was more than 7,715 BTC on 15 July, worth US$489.06mn. Public records suggest that the government is buying one Bitcoin a day at prices between US$61,840 and US$64,492.

“Perhaps we will all have the opportunity to buy Bitcoin at a discount,” El Salvador President Nayib Bukele posted on X.

This still represents a substantial profit for the country as according to data from tracking firm DropsTab, more than US$423mn of public funds has been used to purchase Bitcoin.

How Bukele manages to soothe the IMF remains to be seen. The Extended Fund Facility (EFF) he signed with the institution had a stipulation that El Salvador scaled back its exposure to Bitcoin. It required the reserve to remain unchanged and demanded that the Legislative Assembly made merchant acceptance of Bitcoin voluntary, not obligatory.

El Salvador did ban tax payments via Bitcoin, liquidated the Fidebitcoin trust, disclosed public-sector wallet addresses and adopted a plan to end public participation in the Chivo digital wallet. However, the EFF prohibits the accumulation of Bitcoin with public funds.

According to Max Keiser, El Salvador’s chief Bitcoin advisor, the country aims to accumulate around 20,000 BTC. A three fold increase in its holdings would require serious negotiations with the IMF.

Fitch Ratings describes the Extended Fund Facility as having “stalled” and the second and third programme reviews set for September 2025 and March 2026 have not been completed. This has delayed access to disbursements which El Salvador needs to shore up public spending and especially its debt to pensions which stands at US$11.57bn as of May 2026.

Fitch affirmed El Salvador’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B-‘ with a Stable Outlook in April of this year. They consider a 2023 pension-related debt operation a default on a distressed debt exchange.

Pension reform is a further demand of the IMF and remains a political hot potato. An actuarial study suggests the Solidarity Guarantee Account could run out by 2029.

Perhaps the greater conflict between the IMF and El Salvador is in the marketing of Bitcoin. The State continues to publicly promote a one-BTC-per day strategy but the IMF stated that the increase in the Strategic Bitcoin Reserve Fund reflects a consolidation of BTC across various government-owned wallets, rather than new market purchases. The issue will become clearer in the coming months when the IMF arrives to complete their programme reviews. Part of the EFF stipulations include audited financial reports for all Bitcoin-linked public entities.

Digital asset platform Bitfinex believes there are three profiles of Bitcoin users in El Salvador – the saver seeking to protect capital, companies that have incorporated Bitcoin into their financial strategy and institutions that are betting on tokenization.

El Salvador has been at the vanguard of creating the legal and financial framework to allow for digital assets to be traded. However, Bitfinex argues that a regional approach is required.

“For both individual and corporate use cases to evolve into a permanent and robust infrastructure, Latin America needs a unified foundation with institutional standards. The momentum generated by users and corporate treasuries has already demonstrated the potential of blockchain infrastructure,” said Fabián Delgado, Business Development Manager for Colombia and Latin America at Bitfinex

“Now the responsibility lies with the ecosystem developers and those responsible for designing public policies that will allow the construction of a formal financial architecture for the region.”

Even with laws in place and financial options to purchase Bitcoin and other digital assets, the next step El Salvador and Central America needs to take is in adoption. Remittances received by crypto increased by 41.7% between January and July of this year, to US$29.25mn.

Five years after the Bitcoin Law came into being, the realities of day-to-day public finance might end up crushing Bukele’s dream.

Source: Central America Briefing | Vol 14, Issue 15