Guatemala: Economic activity grows at record-high pace in April
June 14, 2021
Economic activity increased 12.4% year-on-year in April (March: +9.4% yoy). April's reading marked the best result on record on the back of a favorable base effect: The country was in lockdown in the same month a year prior amid the onset of the Covid-19 pandemic.
The print was driven by robust growth in the trade and repair of vehicles; manufacturing; food services; and personal services sectors.
Meanwhile, annual average growth in economic activity swung from a 0.7% contraction in March to a 1.1% expansion in April.
Looking ahead, economic activity is likely to have grown at a new record-high in May as activity nosedived in the same month a year prior. In the months ahead, economic activity should continue growing at a strong pace, although at a softening rate due to a fading base effect.
Analysts at The EIU commented:
“Guatemala is experiencing a solid V-shaped recovery, buoyed by record inflows of workers' remittances from abroad. […] However, the recovery has so far been uneven, supported by private consumption (amid high inflows of remittances) on the demand side, and, on the supply side, by the fast reopening of industry. The services sector continues to lag; we anticipate a gradual pick-up in services in 2021-22, given that containment measures have mostly been dialled down, although the sector will suffer a setback in the second quarter, as some targeted restrictions were reimposed in April.”