Guatemala Economic Outlook
May 19, 2020Covid-19 has drastically darkened the economic narrative in recent months. In April, remittances nosedived over the same month a year prior in tandem with skyrocketing unemployment in the U.S., where most remittances originate from. Contracting remittances, coupled with domestic containment measures, will weigh heavily on household consumption in the second quarter. This follows a first quarter in which the economy likely received a blow from the pandemic and worldwide restrictive measures adopted in March. However, data through February was relatively positive: Export growth accelerated notably in the period, while growth in the economic activity index was fairly robust. Government fiscal measures to mitigate the fallout now total around 3.4% of GDP, financed largely through new debt and World Bank and IADB loans, while authorities recently allowed some economic activities to resume.
Guatemala Economic GrowthGDP is forecast to shrink this year on the back of the economic fallout from the Covid-19 pandemic, which will drag on tourism, trade and domestic activity. In addition, a shrinking U.S. economy will weigh on remittances and thus household spending in Guatemala. A recent uptick in coronavirus cases and domestic political fragmentation cloud the outlook. FocusEconomics Consensus Forecast panelists estimate the economy to contract 2.0% in 2020, which is down 1.4 percentage points from last month, and to expand 3.9% in 2021.
Guatemala Economy Data
5 years of Guatemala economic forecasts for more than 30 economic indicators.
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|Exchange Rate||7.71||0.22 %||Jan 01|
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Guatemala Economic News
June 25, 2020
At its 24 June meeting, the Monetary Board unanimously decided to reduce the policy rate by 25 basis points from 2.00% to 1.75%—an all-time low.
June 9, 2020
Consumer prices increased 0.19% from the previous month in May, below the 0.71% increase seen in April.
June 8, 2020
Remittances from workers abroad fell 14.2% year-on-year in May, up from April’s 20.2% drop.
May 27, 2020
At its 27 May meeting, the Monetary Board of the Bank of Guatemala (Banguat) stood pat and kept the key interest rate at an all-time low of 2.00%, where it has been since March. The decision was based on anchored inflation expectations, and the fact that many governments around the world are lifting restrictions on activity, which Banguat judged would support the Guatemalan economy in H2.
May 21, 2020
Economic activity contracted 4.9% year-on-year in March, swinging from the 2.8% expansion logged in February and coming on the back of containment measures including the suspension of all non-essential activities; border closures; a travel ban; and curfews. Consequently, annual average growth in the economic activity index eased to 3.1% in March from 3.8% in February.