Guatemala Economic Outlook
Largest economy in Central America:
Guatemala has the largest economy in Central America, with a GDP exceeding $90 billion. The country has shown relative macroeconomic stability, with annual growth averaging 3–4% over the past decade. Despite global shocks such as the COVID-19 pandemic, Guatemala was one of the few Latin American countries to avoid a full-year recession in 2020, contracting only slightly before rebounding with 8% growth in 2021.
Remittances and consumption-driven growth:Remittances from Guatemalans living abroad, primarily in the United States, are a major driver of the economy, accounting for nearly 20% of GDP. These inflows fuel domestic consumption and help support millions of households, but also highlight the country’s reliance on external income rather than local industrial expansion. The private sector is primarily composed of commerce and services, while agriculture—mainly coffee, sugar, and bananas—remains a key export sector.
Challenges to industrialization and investment:While Guatemala has strong macroeconomic fundamentals, including low public debt (below 30% of GDP) and a stable currency, the country struggles with deep structural challenges. Widespread poverty, inequality, and corruption hinder economic development. The business climate remains weak due to inadequate infrastructure, weak rule of law, and security concerns, deterring foreign investment outside of sectors like textiles and agribusiness. The country's informal economy accounts for around 70% of employment, limiting tax revenues and reducing productivity.
Political uncertainty and governance risks:Political instability has been a persistent concern, with frequent corruption scandals and governance issues affecting investor confidence. The controversial 2023 presidential election raised concerns about democratic backsliding, potentially impacting future trade and investment agreements. However, Guatemala remains a key trade partner of the U.S. under CAFTA-DR, benefiting from preferential access to American markets.
Guatemala’s economic forecasts:Guatemala’s economic growth is projected to hover around 3–4% in the coming years, supported by remittance-driven consumption and resilient export performance. However, long-term growth prospects remain constrained by low levels of investment, limited infrastructure, and governance concerns. Structural reforms, enhanced security, and improved public services will be crucial to unlocking the country’s full economic potential and reducing poverty.
Guatemala's Macroeconomic Analysis:
Nominal GDP of USD 113.1 billion in 2024.
Nominal GDP of USD 104.4 billion in 2023.
Nominal GDP of USD 104.4 billion in 2023.
GDP per capita of USD 5,932 compared to the global average of USD 10,589.
GDP per capita of USD 5,932 compared to the global average of USD 10,589.
GDP per capita of USD 6,338 compared to the global average of USD 10,589.
Average real GDP growth of 3.6% over the last decade.
Average real GDP growth of 3.6% over the last decade.
Average real GDP growth of 3.6% over the last decade.
Sector Analysis
In 2022, services accounted for 62.4% of overall GDP, manufacturing 14.0%, other industrial activity 14.4%, and agriculture 9.2%. Looking at GDP by expenditure, private consumption accounted for 87.8% of GDP in 2023, government consumption 11.6%, fixed investment 16.4%, and net exports -15.8%.International trade
In 2023, manufactured products made up 45.8% of total merchandise exports, mineral fuels 1.9%, food 48.6%, ores and metals 0.9% and agricultural raw materials 2.7%, with other categories accounting for 0.1% of the total. In the same period, manufactured products made up 63.4% of total merchandise imports, mineral fuels 16.7%, food 17.0%, ores and metals 1.1% and agricultural raw materials 1.8%, with other goods accounting for 0.0% of the total. Total exports were worth USD 13.30 billion in 2024, while total imports were USD 29.10 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 3.6% in the decade to 2023. To read more about GDP growth in Guatemala, go to our dedicated page.
Fiscal policy
Guatemala's fiscal deficit averaged 1.9% of GDP in the decade to 2023. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 2.6% in the decade to 2023. For more information on Guatemala's unemployment click here.
Inflation
Inflation averaged 4.1% in the decade to 2024. Go to our Guatemala inflation page for extra insight.
Monetary Policy
Guatemala's monetary policy rate ended 2024 at 4.50%, up from 4.00% a decade earlier. See our Guatemala monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the quetzal weakened by 1.3% vs the U.S. dollar. For more info on the quetzal, click here.
Economic situation in Guatemala
Economic growth remained robust early in 2025, easing only slightly from Q4 2024’s two-and-a-half-year high. While annual economic activity growth fell to 3.9% in Q1 (Q4 2024: +4.5% yoy), it remained strong likely thanks to soaring remittances and prior interest rate cuts boosting domestic activity. On the external front, merchandise exports growth remained strong, while import growth was broadly stable. Turning to Q2, our panelists see GDP growth easing from Q1 levels as remittance inflow growth softened in April–May. Still, momentum should stay relatively strong, and early data for the quarter is upbeat: In April, economic activity growth remained near Q1 levels and goods exports rose at a faster pace than in Q1. In other news, the recent drafting of a U.S. bill to tax remittance outflows would hurt the Guatemalan economy—money from abroad makes up almost 20% of GDP.Guatemala Economic Forecasts
Projections out to 2034.47 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 17 expert analysts.
Want to get insight on the economic outlook for Guatemala in the coming years? FocusEconomics collects projections out to 2034 on 47 economic indicators for Guatemala from a panel of 17 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Guatemala economy. To download a sample report on the Guatemala's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.