Guatemala: Economy sees sharp deceleration in Q2
October 9, 2015
In Q2 2015, the economy expanded 3.5% over the same period of the previous year, marking the lowest figure in five quarters. The expansion marked a sharp slowdown compared to the 4.8% increase tallied in Q1 2015. The deceleration was mainly due to a deterioration in the external sector’s contribution.
Government consumption fell by 2.0%, contrasting Q1’s 6.9% expansion, marking the lowest reading since December 2004. Private consumption improved, climbing 5.6% (Q1: +5.0% year-on-year), the highest reading since March 2008. Meanwhile, fixed investment performed substantially better, increasing 7.2% compared to last quarter’s increase of 3.6%.
On the external side of the economy, exports of goods and services in Q2 were in line with Q1’s reading of a 3.5% expansion. Imports accelerated from a 4.1% increase in Q1 to a 7.1% rise in Q2. As a result, the external sector’s net contribution to overall growth deteriorated from minus 0.7 percentage points in Q1 to minus 1.8 percentage points in Q2.
Author: Robert Hill, Economist