Guatemala Economic Forecast

Guatemala Economic Outlook

October 9, 2018

The Guatemalan economy regained steam in the second quarter on the back of strong domestic demand. The pace of growth in private consumption nearly doubled, with households benefitting from robust remittances growth. Moderating inflationary pressures provided further stimulus to private consumption. On the other hand, the external sector weakened, with exports contracting sharply and imports rebounding. Looking at the third quarter, the domestic economy likely continued to drive economic momentum. Remittances growth remained strong throughout the quarter, and remittances reached the highest USD value ever recorded in August, boding well for private consumption. Moreover, economic activity shifted into a higher gear in August. However, severe drought conditions in the north of the country could have dampened agricultural output.

Guatemala Economic Growth

Economic growth is expected to tick up next year on the back of strong domestic demand. A tight labor market should drive wage growth while strong remittances inflows are likely to provide a further boost to household spending. Meanwhile, government infrastructure spending should be solid. Potential political and economic uncertainty leading up to next year’s presidential elections pose downside risks, however. Met the why particular Consensus Forecast panelists expect the Guatemalan economy to expand 3.1% this year and 3.2% in 2019, down 0.1 percentage points from last month’s estimate.

Guatemala Economy Data

20132014201520162017
Population (million)15.615.916.316.616.9
GDP per capita (USD)3,4633,6653,9384,1264,467
GDP (USD bn)54.058.464.068.475.6
Economic Growth (GDP, annual variation in %)3.74.24.13.12.8
Consumption (annual variation in %)3.94.15.13.53.4
Investment (annual variation in %)1.54.45.92.73.1
Industrial Production (annual variation in %)3.54.63.73.01.9
Fiscal Balance (% of GDP)-2.1-1.9-1.4-1.1-1.4
Public Debt (% of GDP)24.624.724.324.223.9
Money (annual variation in %)9.08.79.56.68.4
Inflation Rate (CPI, annual variation in %, eop)4.43.03.14.25.7
Inflation Rate (CPI, annual variation in %)4.33.42.44.54.4
Policy Interest Rate (%)5.004.003.003.002.75
Exchange Rate (vs USD)7.847.607.637.527.35
Exchange Rate (vs USD, aop)7.867.747.667.607.35
Current Account (% of GDP)-2.6-2.1-0.21.51.5
Current Account Balance (USD bn)-1.4-1.2-0.11.01.1
Trade Balance (USD billion)-6.2-6.1-5.6-5.2-6.0
Exports (USD billion)11.211.011.811.611.1
Imports (USD billion)16.417.116.415.817.1
Exports (annual variation in %)1.07.8-1.8-2.05.1
Imports (annual variation in %)3.84.3-4.1-3.98.5
International Reserves (USD)7.37.37.89.211.8
External Debt (% of GDP)31.933.131.631.0-  

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Guatemala Facts

ValueChangeDate
Exchange Rate7.740.22 %Oct 16

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