Guatemala: Economic growth slows sharply on weak domestic demand
July 5, 2013
In the first quarter, GDP expanded 2.4% over the same period last year, which was well below the 3.1% rise observed in the fourth quarter (previously reported: +3.2% year-on-year). The print marks, in fact, the weakest expansion seen since Q3 2010.
The deterioration in Q1 reflected a deceleration in domestic demand, which grew a weak 0.8% (Q4 2012: +4.7% yoy). Total consumption lost ground in the first quarter (Q4: +4.1% yoy; Q1: +1.8% yoy) on the back of slowing private consumption (Q4: +3.0% yoy; Q1: +1.7% yoy) and a sharp moderation in public spending (Q4: +12.1% yoy; Q1: +2.8% yoy). Moreover, fixed investment contracted 0.1%, contrasting the 5.0% rise witnessed in Q4.
On a positive note, the external sector improved markedly due to a rebound in exports of goods and services, which climbed 4.0% over the same period last year (Q4: +1.9% yoy). On the other hand, imports declined 1.1% (Q4: +6.9% yoy). As a result, the external sector's net contribution to overall growth swung from minus 1.8 percentage points in the fourth quarter to plus 1.5 percentage points in the first.
The Central Bank expects the economy to grow between 3.5% and 3.9% in 2013. FocusEconomics Consensus Forecast participants see GDP growing 3.3% this year, which is unchanged from last month's forecast. For next year, panellists expect the economy to expand 3.4%.