Guatemala Economic Forecast

Guatemala Economic Outlook

July 10, 2018

Economic growth slowed to a multi-year low in the first quarter on the back of softening domestic demand. Despite a rise in income levels and robust remittances growth, private consumption lost steam in the quarter, while public expenditure growth nearly halved. Meanwhile, fixed investment growth remained virtually unchanged from the prior quarter. The external sector fared poorly, with both exports and imports contracting markedly in the quarter. Looking at Q2, the economy should have accelerated somewhat as remittances growth was particularly strong in the first two months of the quarter: In April, remittances increased by more than a fifth over a year ago, while they reached the highest USD value on record in May, boding well for private consumption. Moreover, the Central Bank’s monthly economic activity index showed that the average reading trends higher in Q2 than the quarter prior.

Guatemala Economic Growth

Domestic demand is expected to propel the economy this year. Robust labor market developments and strong remittances growth should support private consumption, and infrastructure spending will likely spur government expenditure. However, downside risks stem from potential political and economic uncertainty leading up to next year’s presidential elections. FocusEconomics Consensus Forecast panelists expect the Guatemalan economy to expand 3.2% this year, unchanged from last month’s estimate, and 3.3% in 2019.

Guatemala Economy Data

20132014201520162017
Population (million)15.615.916.316.616.9
GDP per capita (USD)3,4633,6653,9384,1264,467
GDP (USD bn)54.058.464.068.475.6
Economic Growth (GDP, annual variation in %)3.74.24.13.12.8
Consumption (annual variation in %)3.94.15.13.53.4
Investment (annual variation in %)1.54.45.92.73.1
Industrial Production (annual variation in %)3.54.63.73.01.9
Fiscal Balance (% of GDP)-2.1-1.9-1.4-1.1-1.4
Public Debt (% of GDP)24.624.724.324.223.9
Money (annual variation in %)9.08.79.56.68.4
Inflation Rate (CPI, annual variation in %, eop)4.43.03.14.25.7
Inflation Rate (CPI, annual variation in %)4.33.42.44.54.4
Policy Interest Rate (%)5.004.003.003.002.75
Exchange Rate (vs USD)7.847.607.637.527.35
Exchange Rate (vs USD, aop)7.867.747.667.607.35
Current Account (% of GDP)-2.6-2.1-0.21.51.5
Current Account Balance (USD bn)-1.4-1.2-0.11.01.1
Trade Balance (USD billion)-6.2-6.1-5.6-5.2-6.0
Exports (USD billion)10.211.010.810.611.1
Imports (USD billion)16.417.116.415.817.1
Exports (annual variation in %)1.07.8-1.8-2.05.1
Imports (annual variation in %)3.84.3-4.1-3.98.5
International Reserves (USD)7.37.37.89.211.8
External Debt (% of GDP)31.933.131.631.0-  

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Guatemala Facts

ValueChangeDate
Exchange Rate7.490.22 %Jul 11

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