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.
Author: Christopher Mc Innes, Economist