Guatemala Economic Forecast

Guatemala Economic Outlook

February 13, 2018

After recovering somewhat in the third quarter from Q2’s seven-year low, economic growth appears to have been more sure-footed in Q4 2017 and is likely to have accelerated slightly. Preliminary estimates released by the Central Bank ahead of Q4 GDP figures put full-year growth for 2017 at 2.8%, suggesting a pick-up in activity at the end of the year. Economic growth in Q4 likely benefited from healthy remittance inflows. The stronger economic momentum appears to have carried into this year, with growth in remittances speeding up and private sector confidence improving to a six-month high, according to a survey by the Central Bank. President Jimmy Morales announced a Cabinet reshuffle on January 16, replacing the ministers for the economy, the environment and social development. The decision is not expected to have a significant economic impact.

Guatemala Economic Growth

Due to a booming U.S. economy, remittances should keep supporting household spending throughout 2018, boosting GDP growth. Government spending is also expected to increase, with a large investment plan in infrastructure and education announced, despite no approved budget. However, ongoing corruption scandals involving President Morales weigh on the outlook, while further downside risks stem from the possibility of changes in U.S. trade and immigration policies. FocusEconomics panelists forecast that GDP will grow 3.3% in 2018, which is unchanged from last month’s forecast, and 3.4% in 2019.

Guatemala Economy Data

20122013201420152016
Population (million)15.115.515.916.316.7
GDP per capita (USD)3,3303,4883,6773,9354,103
GDP (USD bn)50.354.058.464.068.4
Economic Growth (GDP, annual variation in %)3.03.74.24.13.1
Consumption (annual variation in %)3.53.94.25.13.5
Investment (annual variation in %)3.61.54.45.92.3
Industrial Production (annual variation in %)3.33.53.23.53.6
Fiscal Balance (% of GDP)-2.4-2.1-1.9-1.4-1.1
Public Debt (% of GDP)24.124.624.724.224.2
Money (annual variation in %)9.89.08.79.56.6
Inflation Rate (CPI, annual variation in %, eop)3.54.43.03.14.2
Inflation Rate (CPI, annual variation in %)3.84.33.42.44.5
Policy Interest Rate (%)5.005.004.003.003.00
Exchange Rate (vs USD)7.907.847.607.637.52
Exchange Rate (vs USD, aop)7.837.867.747.667.60
Current Account (% of GDP)-2.6-2.6-2.1-0.21.3
Current Account Balance (USD bn)-1.3-1.4-1.2-0.10.9
Trade Balance (USD billion)-5.7-6.2-6.1-5.6-5.3
Exports (USD billion)10.110.211.010.810.4
Imports (USD billion)15.816.417.116.415.8
Exports (annual variation in %)-3.81.07.8-1.8-3.2
Imports (annual variation in %)1.93.84.3-4.1-3.9
International Reserves (USD)6.77.37.37.89.2
External Debt (% of GDP)12.513.112.131.5-  

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Guatemala Facts

ValueChangeDate
Exchange Rate7.370.22 %Feb 22

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