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.
Author: Christopher Mc Innes, Economist