Guatemala: Economic activity improves slightly in first quarter
July 14, 2012
In the first quarter, GDP expanded 3.4% over the same period a year ago, which was virtually unchanged from the 3.3% increase observed in the fourth quarter of 2011. The first quarter reading represented the first pick-up in economic growth since the second quarter of 2011. The first quarter reading mainly reflected how a fall in the external sector's net contribution to overall growth was more than compensated by stronger domestic demand. Total consumption rose markedly in the first quarter (Q4 2011: +2.8% year-on-year; Q1 2012: +5.0% yoy) on the back of resilient private consumption (Q4: +2.5% yoy; Q1: +5.1% yoy). Government spending, on the other hand, slowed from a 4.5% expansion to a 3.9% increase. Meanwhile, fixed investment moderated from a 3.7% rise in the last quarter of 2011 to a 1.2% increase in the first quarter. That said, GDP benefited from stronger stockpiling in the first quarter. Meanwhile, the external sector deteriorated noticeably due to slower shipments and rising purchases from overseas. Exports of goods and services increased 2.6% in the first quarter (Q4: +3.0% yoy), while imports rebounded to an 8.2% expansion (Q4: -7.3% yoy). As a result, the external sector's net contribution to overall growth was minus 2.3 percentage points, contrasting the plus 3.4 percentage points observed in the fourth quarter. The Central Bank expects the economy to grow between 2.9% and 3.3% this year and between 3.5% and 3.9% in 2013.