Guatemala: Economic activity moderates to an almost two-year low in second quarter
October 8, 2012
In the second quarter, GDP expanded 2.5% over the same period a year ago, which was a full percentage point below the 3.5% rise tallied in the first quarter. Moreover, the print undershot the 3.0% rise anticipated by last month's Consensus Forecast and marked, in fact, the lowest expansion rate since the third quarter of 2010. The deterioration mainly reflected a slowdown in domestic demand, which grew a weak 1.2% (Q1: +4.6% year-on-year). Total consumption moderated in the second quarter on the back of slower private consumption (Q1: +4.5% yoy; Q2: +3.4% yoy) and near-zero growth in public spending (Q1: +3.5% yoy; Q2: +0.4% yoy). Meanwhile, fixed investment jumped from a 0.6% rise in Q1 to a 5.7% expansion in the second quarter. That said, total investment was dragged down by a sharp destocking process. Meanwhile, the external sector improved markedly due to faster shipments and falling purchases from overseas. Exports of goods and services increased 3.5% in the second quarter (Q1: +2.6% yoy), while imports fell 1.8% (Q1: +6.7% yoy). As a result, the external sector's net contribution to overall growth shifted from a 1.8 percentage-point detraction in the first quarter to a 1.6 percentage-point contribution in the second.