Guatemala Economic Forecast

Guatemala Economic Outlook

September 12, 2018

Data suggests that the economy regained steam in the second quarter after decelerating in the first quarter. Throughout the second quarter, monthly economic activity readings were markedly higher than those observed in the first quarter, buoyed by a robust wholesale and retail sub-sector. The sub-sector was likely supported by strong remittances growth and moderating inflationary pressures providing further stimulus to household expenditure. On the other hand, the external sector likely limited the pace of expansion as exports contracted while imports rose, causing the trade deficit to widen. Looking at the third quarter, the domestic economy should continue to drive economic momentum. In July, remittances reached the highest USD value ever recorded, while inflation reached a multi-year low. This bodes well for private consumption. Moreover, economic activity shifted into a higher gear in the same month. However, severe drought conditions in the north of the country could dampen agricultural output.

Guatemala Economic Growth

Economic growth is expected to accelerate this year on the back of strong domestic demand. A tight labor market should drive wage growth while strong remittances inflows are likely to provide a further boost to household spending. Meanwhile, government infrastructure spending should be solid. Potential political and economic uncertainty leading up to next year’s presidential elections pose downside risks, however. FocusEconomics Consensus Forecast panelists expect the Guatemalan economy to expand 3.1% this year, unchanged from last month’s estimate, and 3.3% in 2019.

Guatemala Economy Data

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 %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
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 %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)
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-
Current Account Balance (USD bn)-1.4-1.2-
Trade Balance (USD billion)-6.2-6.1-5.6-5.2-6.0
Exports (USD billion)
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)
External Debt (% of GDP)31.933.131.631.0-  

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Guatemala Facts

Exchange Rate7.690.22 %Sep 20

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Guatemala Economic News

  • Guatemala: Inflation returns to Central Bank’s target range in August

    September 20, 2018

    Consumer prices rose 0.44% in August over the previous month in Guatemala, up from July’s 0.36% increase.

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  • Guatemala: Economic activity shifts into higher gear in July

    September 6, 2018

    Data from Banguat’s monthly index of economic activity (IMAE, Índice Mensual de la Actividad Económica) showed that economic activity swung to a 1.1% expansion in July over the previous month, contrasting June’s revised 0.1% contraction (previously reported: 0.0% month-on-month). On a year-on-year basis, growth in economic activity in July picked up steam to 3.4% from 3.0% in the previous month.

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  • Guatemala: Economic activity remains solid in June

    September 4, 2018

    Data from Banguat’s monthly index of economic activity (IMAE, Indice Mensual de la Actividad Económica) showed that economic activity growth was flat in June from the previous month, contrasting May’s upwardly revised 0.7% expansion (previously reported: +0.4% mom). On a year-on-year basis, growth in economic activity in June was stable at May’s revised 3.2% expansion (previously reported: +2.6% year-on-year).

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  • Guatemala: Inflation drops in July

    September 4, 2018

    Consumer prices in Guatemala increased 0.36% in July over the previous month, decelerating from June’s 0.57% increase.

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  • Guatemala: Remittances reach a record high in July

    September 4, 2018

    The pace of growth in remittances from workers abroad more than doubled at the start of the third quarter.

    Read more

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