Guatemala GDP Q4 2016


Guatemala: Economy accelerates in Q4 2016

April 7, 2017

In Q4 2016, the economy expanded 3.0% over the same period of the previous year. The result marked an acceleration from Q3’s 2.6% pace of growth. The acceleration was due to a positive contribution from the external sector, which more than offset weakening domestic demand. Q4’s GDP outturn brought full-year growth to 3.1% in 2016, a sharp slow-down from 2015’s 4.1% GDP growth rate.

Private consumption growth slowed from 4.4% in Q3 to 4.0% in Q4, despite strong remittances growth. Government consumption growth also slowed, falling from 2.2% to 1.6% in Q4. On the other hand, fixed investment growth accelerated to 1.4%, up from 0.6% in Q3. Despite this acceleration, a fall in inventories caused overall investment to fall into contractionary territory: total investment contracted 5.0% in Q4, contrasting the 3.3% expansion observed in Q3. As a result, growth in domestic demand decreased from 4.0% in Q3 to 2.4% in Q4.

On the external side of the economy, exports grew 4.4% in Q4, contrasting the 1.5% contraction in Q3. With domestic demand weakening, import growth slowed from 2.2% in Q3 to 0.9% in Q4. As a result, the external sector’s contribution to growth improved from minus 1.3 percentage points in Q3 to plus 0.8 percentage points in Q4.

The Central Bank forecasts that GDP will grow between 3.0% and 3.8% in 2017 and between 3.0% and 4.0% in 2018. Consensus Forecast participants see GDP growing 3.6% in 2017, which is down 0.1 percentage points from last month’s forecast. For 2018, panelists also expect the economy to expand 3.6%.

Author:, Economist

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