Guatemala Economic Forecast

Guatemala Economic Outlook

January 15, 2019

Economic growth picked up pace in the third quarter of 2018 on the back of resilient domestic demand and despite a weak external sector performance. Although easing slightly, growth in private consumption remained sturdy and benefited from strong growth in remittances. Meanwhile, public consumption and fixed investment growth shifted into a higher gear in the quarter, picking up some of the slack. On the other hand, exports contracted at a sharper pace while import growth accelerated. With that said, strong import growth is normally a sign of robust domestic demand. Looking at the final quarter of 2018, economic activity kept up pace in October and November, while growth in remittances remained strong through the quarter. Overall, a preliminary estimate from the Central Bank suggests annual growth accelerated slightly in 2018. In other news, after a year of tensions between the government and the UN, Guatemala pulled out of the UN’s anti-corruption commission and expelled its commissioners. This followed an investigation into government officials and top presidential aides.

Guatemala Economic Growth

Firming domestic demand should support economic growth this year, with private consumption benefiting from a tight labor market and resilient remittances inflows. On the other hand, heightened political risk in the lead-up to this year’s elections poses a downside risk to economic activity, threatening consumer and investor confidence. Met the why particular Consensus Forecast panelists expect the Guatemalan economy to expand 3.1% in 2019, which is unchanged from last month’s forecast, and 3.0% in 2020.

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 Rate7.720.22 %Jan 21

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