Consumption in Guatemala
Guatemala - Consumption
Economic growth reaches multi-year high in Q1
Economic growth firmed in the opening quarter of the year, with GDP expanding 4.8% year-on-year. The print, which was up from the fourth quarter’s 3.0% expansion, marked the best result since the third quarter of 2015 and came on the back of healthier demand dynamics at home.
Private consumption grew 5.8% year-on-year in Q1, up from the 2.7% expansion logged in the prior quarter, despite lingering Covid-19 restrictions at home. The acceleration partly reflected healthy growth in remittances as the labor market in the United States, where the majority of remittances originate from, tightened due to the easing of restrictive measures. Fixed investment, meanwhile, jumped 20.3% in annual terms in the first quarter. This was up markedly from the 0.7% expansion logged in the fourth quarter of last year and likely reflected more upbeat business expectations amid the gradual easing of global restrictions. On the other hand, government consumption contracted 1.4% in the quarter, swinging from the 9.5% increase recorded in Q4 and weighing on the headline reading.
On the external front, growth in exports of goods and services cooled to 3.9% from 6.5% in the fourth quarter. Imports of goods and services, on the other hand, grew at a stronger pace of 10.3% in the first quarter compared to 2.3% in the prior period. Consequently, net exports contributed negatively to the headline reading.
Looking ahead, household spending is expected to have gained further traction in the second quarter amid record-breaking growth in remittances. The gradual unwinding of restrictive measures at home and abroad should further fuel economic activity this year. Downside risks remain, however, amid lingering uncertainty over the course of the pandemic and vaccine availability.
Analysts at the EIU added:
“Guatemala is experiencing a solid V-shaped recovery, buoyed by record inflows of workers' remittances from abroad. […] However, the recovery has so far been uneven, supported by private consumption (amid high inflows of remittances) on the demand side, and by the fast reopening of industry on the supply side. The services sector continues to lag, although we anticipate a firmer recovery in activity in the second half of 2021 and in 2022.”
FocusEconomics Consensus Forecast panelists expect the economy to grow 3.4% in 2021, which is unchanged from last month’s projection. For 2022, our panelists expect the economy to grow 3.5%.
Guatemala - Consumption Data
|Consumption (annual variation in %)||4.7||3.2||3.1||3.8||4.2|
5 years of economic forecasts for more than 30 economic indicators.
Guatemala Consumption Chart
Source: National Statistical Institute and FocusEconomics calculations.
|Exchange Rate||7.71||0.22 %||Jan 01|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
September 9, 2021
Economic activity increased 10.6% in July over the same month a year prior, cooling somewhat from the 13.9% increase recorded in June.
September 9, 2021
Remittances totaled a record-high of USD 1,388.6 million in August, rising 32.2% year-on-year (July: +25.5% yoy).
September 9, 2021
Consumer prices increased 0.21% from the previous month in August, following the 0.33% rise seen in July.
September 7, 2021
The Monetary Board of the Central Bank of Guatemala (Banguat) opted to stand pat at its 25 August meeting, leaving the monetary policy rate unchanged at the all-time low of 1.75%.
August 10, 2021
Consumer prices increased 0.33% from the previous month in July, picking up from the 0.19% increase logged in June.