Guatemala GDP Q3 2016

Guatemala

Guatemala: Economy slows in Q3

January 16, 2017

In Q3 2016, the Guatemalan economy expanded 2.6% over the same period of the previous year, the slowest pace in four years. The result followed Q2’s revised 3.6% pace of growth (previously reported: 3.4% year-on-year). The deceleration was due to a steep fall in total investment growth, cancelling out improvements in other components.

Private consumption growth accelerated from 3.9% in Q2 to 4.3% in Q3, thanks to strong remittance inflows. Government consumption returned to growth for the first time since Q1 2015, growing 1.8% in Q3, contrasting the 6.2% contraction in Q2. Fixed investment growth slowed to 1.3%, down from 1.6% in Q3 and the slowest growth rate in over one year. This, together with a fall in inventories brought down the overall investment figure from 12.0% in Q2 to 5.6% in Q3. As a result, growth in domestic demand increased from 3.9% in Q2 to 4.2% in Q3.

On the external side of the economy, the contraction in exports slowed from 2.1% in Q2 to 0.5% in Q3. Import growth accelerated from 1.3 % in Q2 to 1.6% in Q3. As a result, the external sector’s contribution to growth improved from minus 1.1 percentage points in Q2 to minus 0.8 percentage points in Q3.

Consensus Forecast participants see GDP growing 3.7% in 2017, which is up 0.1 percentage points from last month’s forecast. For 2018, panelists expect the economy to also expand 3.7%.


Author:, Economist

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Guatemala GDP Q316

Note: Year-on-year changes of GDP in %
Source: Guatemala Central Bank and FocusEconomics Consensus Forecast


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