Guatemala Economic Forecast

Guatemala Economic Outlook

December 7, 2017

Sluggishness in the economy remains apparent; after posting the weakest quarter of GDP growth in nearly seven years in Q2, prospects for a strong turnaround in the second half of the year appear increasingly uncertain. That said, recent data shows economic activity ticked up slightly in September from August on higher turnover in the manufacturing and service sectors. Remittances from abroad have also been on a tear in the past few months on the strength of the U.S. economy, most recently notching impressive growth in October. Moreover, the depreciation of the quetzal since September’s political crisis should lift exports through the remainder of the year, while a recent industry report points to strong coffee exports this year thanks to robust harvests. President Jimmy Morales continues to ignore calls for his resignation in the wake of corruption allegations. In November, Morales urged Congress to approve next year’s budget, which is set to include increased public investment and add to the public debt.

Guatemala Economic Growth

Despite a weak first half of the year, GDP growth is expected to be more solid in the second half of the year. In the medium term, robust remittance inflows are expected to sustain solid growth in household spending and grow the low tax base. That said, ongoing political scandals have upset business confidence and will cap the private sector’s willingness to invest. Our panelists forecast that GDP will grow 3.3% in 2018, which is down 0.1 percentage points from last month's forecast, and 3.5% 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 Rate7.340.22 %Dec 06

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