Guatemala Economic Forecast

Guatemala Economic Outlook

August 7, 2018

Economic activity is expected to have picked up pace in the second quarter, recovering from the first quarter’s multi-year low. The average reading of the Central Bank’s monthly economic activity index in April and May trended above the average reading recorded in the first quarter. Indeed, growth in economic activity reached the highest level in April since October of last year. Data for April and May pointed towards a robust manufacturing sector, while the financial sector and wholesale and retail trade also chipped in. Moreover, annual growth in remittances in the second quarter more than tripled the first quarter’s pace of expansion. In USD value terms, remittances reached the highest monthly level on record in May. In June, confidence in the economy increased after two consecutive drops on the back of a rosier view on the current economic situation and in the next six months.

Guatemala Economic Growth

The economy is expected to shift into a higher gear this year, thanks to robust domestic demand. A tight labor market and strong remittances growth should support household consumption growth, while government expenditure is likely to increase sharply due to infrastructure spending. However, downside risks include potential political and economic uncertainty in the lead-up to next year’s presidential elections. Met the why particular Consensus Forecast panelists expect the Guatemalan economy to expand 3.1% this year, down 0.1 percentage points from last month’s estimate, and 3.3% in 2019.

Guatemala Economy Data

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 %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
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 %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)
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-
Current Account Balance (USD bn)-1.4-1.2-
Trade Balance (USD billion)-6.2-6.1-5.6-5.2-6.0
Exports (USD billion)
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)
External Debt (% of GDP)31.933.131.631.0-  

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Guatemala Facts

Exchange Rate7.490.22 %Aug 15

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