Guatemala Economic Forecast

Guatemala Economic Outlook

September 10, 2019

The economy likely gathered pace in the second quarter after growth slowed to a one-year low in the first quarter. The economic activity index average rate of growth for Q2 was modestly higher than that of Q1, supported by improvements in the private services; manufacturing; and wholesale and retail trade sectors. Moreover, remittance inflows rose robustly throughout Q2, boding well for household spending. Turning to the third quarter, available data paints a mixed picture. Economic activity moderated slightly in July, although private sector business confidence recovered in July and August. In politics, center-right candidate Alejandro Giammattei won the presidential election in a runoff on 11 August. Once in office in January 2020, the newcomer will face issues such as corruption, a more difficult relationship with the U.S., and migrant inflows. His policies will likely be a continuation of current President Morales’.

Guatemala Economic Growth

Economic growth is forecast to slow slightly this year, largely due to weaker private consumption. While an expansionary fiscal stance, healthy fixed investment growth and a rebound in goods and services exports will support growth, a weakening U.S. economy could weigh on remittances in H2, which are an important source of income for Guatemalans. FocusEconomics Consensus Forecast panelists expect the Guatemalan economy to expand 3.0% in 2019, which is unchanged from last month’s forecast, and 3.1% in 2020.

Guatemala Economy Data

20132014201520162017
Population (million)15.615.916.316.616.9
GDP per capita (USD)3,4633,6653,9384,1204,477
GDP (USD bn)54.058.464.068.375.8
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 %)3.54.63.73.11.8
Fiscal Balance (% of GDP)-2.1-1.9-1.4-1.1-1.3
Public Debt (% of GDP)24.624.624.324.223.8
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)-2.6-2.1-0.21.51.6
Current Account Balance (USD bn)-1.4-1.2-0.11.01.2
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 %)1.07.8-1.8-2.04.9
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)32.433.431.831.430.4

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Guatemala Facts

ValueChangeDate
Exchange Rate7.690.22 %Sep 04

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