Guatemala Economic Forecast

Guatemala Economic Outlook

March 17, 2020

The economy seemingly firmed at the start of the new year, after the monthly economic activity index and softer remittances growth indicated a cooling in the final quarter of last year. In January, growth in the monthly economic activity index rose from December’s six-month low on the back of robust growth in the retail, manufacturing and agricultural sectors. Moreover, in the first two months of the year, private consumption growth likely remained healthy as inflationary pressures eased notably, while growth in remittances was markedly stronger; in January, remittances grew at the strongest pace in 17 months. In other news, the government recently announced inbound travel restrictions due to the coronavirus pandemic, which is likely to hit tourism in the near term.

Guatemala Economic Growth

This year, economic growth is expected to ease somewhat compared to last year’s four-year high, although healthy private consumption, underpinned by resilient remittances inflows, should buttress domestic demand. The balance of risks is tilted to the downside owing to softer growth in the U.S., domestic political fragmentation and the coronavirus. FocusEconomics Consensus Forecast panelists estimate the economy to expand 3.4% in 2020, which is unchanged from last month, and 3.5% in 2021.

Guatemala Economy Data

2014 2015 2016 2017 2018
Population (million)15.916.316.616.917.3
GDP per capita (USD)3,6653,8253,9824,2274,222
GDP (USD bn)58.462.266.071.572.9
Economic Growth (GDP, annual variation in %)4.24.12.73.03.1
Consumption (annual variation in %)4.14.73.33.14.0
Investment (annual variation in %)4.4-1.5-1.84.34.4
Industrial Production (annual variation in %)4.62.91.50.61.3
Fiscal Balance (% of GDP)-1.9-1.5-1.1-1.4-1.9
Public Debt (% of GDP)24.624.224.323.924.2
Money (annual variation in %)8.79.56.68.49.4
Inflation Rate (CPI, annual variation in %, eop)3.03.14.25.72.3
Inflation Rate (CPI, annual variation in %)3.42.44.54.43.8
Policy Interest Rate (%)4.003.003.002.752.75
Exchange Rate (vs USD)7.607.637.527.357.73
Exchange Rate (vs USD, aop)7.747.667.607.357.52
Current Account (% of GDP)-2.1-1.30.91.10.7
Current Account Balance (USD bn)-1.2-0.80.60.80.5
Trade Balance (USD billion)-6.1-6.4-6.1-6.8-8.1
Exports (USD billion)11.09.19.09.69.6
Imports (USD billion)17.115.515.116.517.7
Exports (annual variation in %)7.8-3.1-1.27.5-0.2
Imports (annual variation in %)4.3-3.9-3.09.37.5
International Reserves (USD)7.37.89.211.812.8
External Debt (% of GDP)33.432.832.532.130.7

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Guatemala Facts

Value Change Date
Exchange Rate7.710.22 %Jan 01

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Guatemala Economic News

  • Guatemala: Banguat lowers interest rate for first time in over two years in March

    March 19, 2020

    At its 19 March emergency meeting, the Monetary Board of the Bank of Guatemala (Banguat) unanimously cut the key interest rate from 2.75% to 2.25%, marking the first rate cut in over two years. The decision to slash the interest rate chiefly reflected efforts to support activity in the face of the Covid-19 pandemic, which is expected to weigh heavily on the global and domestic economy.

    Read more

  • Guatemala: Inflation eases in February

    March 9, 2020

    Consumer prices fell 0.40% month-on-month in February, down from the 0.24% drop in January.

    Read more

  • Guatemala: Growth in economic activity picks up in January

    March 5, 2020

    Growth in economic activity rose from December’s upwardly revised 3.4% (previously reported: +3.1% year-on-year) to 3.6% in January and signaled that the economy started the year on stronger footing.

    Read more

  • Guatemala: Growth in remittances eases in February

    March 4, 2020

    Remittances from workers abroad rose 17.0% year-on-year in February, moderating from January’s 21.3% increase, and totaled USD 808.0 million (February 2019: USD 690.5 million; January 2020: USD 834.6 million).

    Read more

  • Guatemala: Banguat stands pat in February

    February 19, 2020

    At its 19 February meeting, the Monetary Board of the Bank of Guatemala (Banguat) kept the key interest rate unchanged at 2.75%, where it has now been for over two years. Well-anchored inflation expectations led the decision to stand pat, as the Bank sees inflation in the 3.0%–5.0% target range this year despite temporarily falling below the range in January.

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