Guatemala Economic Forecast

Guatemala Economic Outlook

September 15, 2020

Covid-19 and associated restrictions will have wreaked havoc on the economy in the second quarter. The economic activity index nosedived at a double-digit rate in Q2 due to social distancing measures. Moreover, remittances were pummeled in the quarter and likely weighed on household spending. Imports, meanwhile, plummeted by nearly a fifth, further highlighting weakened domestic demand. Simultaneously, exports dropped sharply as foreign lockdown measures dragged on external demand, while the tourism sector should have also taken a hit. Turning to Q3, remittances grew strongly in July–August, which should have boosted private consumption. The gradual reopening of the economy since late July is likely supporting activity somewhat, although the prohibition of social events since late August will limit a potential recovery.

Guatemala Economic Growth

This year, the economy is expected to shrink for the first time in over three decades as the pandemic weighs heavily on tourism, trade and domestic activity. Moreover, a recession in the U.S. will drag on remittances and thus affect private consumption. Political fragmentation and a prolonged viral outbreak cloud the outlook further. FocusEconomics Consensus Forecast panelists estimate the economy to contract 2.9% in 2020, which is down 0.1 percentage points from last month, and to expand 3.7% in 2021.

Guatemala Economy Data

2015 2016 2017 2018 2019
Population (million)16.316.616.917.317.6
GDP per capita (USD)3,8253,9824,2304,2334,353
GDP (USD bn)62.266.071.673.176.7
Economic Growth (GDP, annual variation in %)4.12.73.03.23.8
Consumption (annual variation in %)4.73.23.13.84.2
Investment (annual variation in %)-1.5-1.74.04.67.2
Industrial Production (annual variation in %)2.91.50.81.63.8
Fiscal Balance (% of GDP)-1.5-1.1-1.4-1.9-2.3
Public Debt (% of GDP)24.925.225.226.226.9
Money (annual variation in %)9.56.68.49.49.8
Inflation Rate (CPI, annual variation in %, eop)3.14.25.72.33.4
Inflation Rate (CPI, annual variation in %)2.44.54.43.83.7
Policy Interest Rate (%)3.003.002.752.752.75
Exchange Rate (vs USD)7.637.527.357.737.71
Exchange Rate (vs USD, aop)7.667.607.357.527.70
Current Account (% of GDP)-1.21.01.10.82.4
Current Account Balance (USD bn)-0.80.60.80.61.9
Trade Balance (USD billion)-7.0-6.6-7.4-8.7-8.7
Exports (USD billion)10.710.411.011.011.2
Imports (USD billion)17.617.018.419.719.9
Exports (annual variation in %)-1.2-2.15.1-0.11.9
Imports (annual variation in %)-3.5-3.68.27.01.1
International Reserves (USD)7.89.211.812.814.8
External Debt (% of GDP)32.832.532.130.6-  

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Guatemala Facts

Value Change Date
Exchange Rate7.710.22 %Jan 01

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