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Guatemala GDP grew by 3.4% in 2022, mainly driven by net exports and remittances from the U.S., which were powered both by the country's economic growth and falling unemployment among the Guatemalan population in the United States. Remittances represent around 30% of household income, and their boost should continue to support household consumption, which accounts for 85% of GDP. Furthermre, according to the IMF, GDP growth rates are expected to remain somewhat stable in the next couple of years, with an estimated growth of 3.2% in 2023 and 3.8% in 2024. Guatemala's economy receives strong financial support from the U.S. and multilateral lenders; is bolstered by free trade agreements with the U.S. and the E.U.; enjoys a privileged proximity to Mexico and the U.S.; and is recognised as a country with high potential in multiple sectors (tourism, agriculture, mining, hydroelectric and geothermal energy).
Guatemala's public deficit closed at -2.5% of GDP in 2022, and is projected to stay stable in 2023 (-2.4%) and 2024 (-2.2%). Public debt reached 30.1% of GDP in 2022 and should also remain relatively unchanged in 2023 (30%) and 2024 (29.7%). Inflation increased to 6.4% in 2022 and should decrease to 5.6% in 2023 and 4.3% in 2024. The return of inflation rates to the middle of the government's target window should continue to support consumption in 2023, allowing the central bank to maintain its expansionary policy and facilitating the growth of credit to the private sector, in keeping with the current administration's pro-business agenda. Nevertheless, Guatemala's challenges are numerous: social and political instability, poor infrastructure, corruption, vulnerability to external factors (natural disasters and commodity prices), reliance on low value-added industries and remittances, low fiscal revenues, and a range of social issues that include rural poverty, inequalities, underemployment, informality, and ethnic divisions. The absence of a redistributive fiscal policy also hinders attempts to reduce inequality. Although the pandemic has significantly impacted the Guatemalan economy, the country has been recovering, with the government implementing measures to counteract the economic crisis resulting from it.
The unemployment rate in Guatemala reached an estimated 4% in 2022, nearly double the rate of 2019, mainly due to the impacts of the pandemic - particularly in the construction sector, services, and transport. In addition, the country's informal sector grew 60% according to Guatemala's Labor and Social Security Minister. Furthermore, more than half of the population live below the poverty line. The country also has one of the highest rates of malnutrition in the world, one quarter of its adults are illiterate, there is a high level of income inequality, and there is a high rate of organised crime and drug trafficking related violence.
Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
---|---|---|---|---|---|
GDP (billions USD) | 77.63 | 86.99 | 93.66 | 102.31 | 111.02 |
GDP (Constant Prices, Annual % Change) | -1.8 | 8.0 | 4.0 | 3.4 | 3.5 |
GDP per Capita (USD) | 4,319 | 4,743 | 5,005 | 5,358 | 5,698 |
General Government Balance (in % of GDP) | -4.2 | -1.8 | -2.5 | -2.3 | -2.1 |
General Government Gross Debt (in % of GDP) | 31.5 | 30.4 | 30.1 | 28.6 | 28.1 |
Inflation Rate (%) | 3.2 | 4.3 | 6.9 | 7.4 | 5.5 |
Current Account (billions USD) | 3.83 | 2.18 | 1.73 | 1.94 | 1.75 |
Current Account (in % of GDP) | 4.9 | 2.5 | 1.8 | 1.9 | 1.6 |
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Guatemala doesn't have many natural resources, but the country still has some reserves of petroleum, land for agriculture, and some small mineral deposits. Main industries in Guatemala include production of coffee; production of textiles, paper industries, petroleum, pharmaceutical products, and rubber processing; and tourism. The country - which has a small mining industry - extracts copper, zinc, iron and nickel - also has strong geothermic and hydroelectric potential. The agricultural sector accounts for 9.4% of GDP and employs 31.3% of the active population. Besides coffee, Guatemalan agriculture involves sugar, bananas, cotton, rubber, cardamom and a variety of precious woods and fruits. In recent years, farm communities - mostly indigenous - have been displaced by land inequality, low plantation wages, and due to food insecurity in the palm oil industry. The agricultural sector grew in 2022, as it benefit from high commodities prices, including palm oil, rubber, and coffee.
The industry sector accounts for 22.2% of GDP and 18.7% of employment. More than half of the economic activity in Guatemala occurs within four sectors: manufacturing, commerce, private service, and agriculture. The industry is primarily focused on producing the following products: textiles, furniture, petroleum, sugar, processed foods, and chemicals. In 2022, the industry sector recorded a good performance, particularly in construction, as the sector remained extremely busy due to heightened public investment in infrastructure and increased investment in the sector as a whole.
The service sector represents the largest share of GDP (62.1%) and employs 50% of the population. Key sectors include tourism, health care, customer service, financial services, banking institutions, hospitality, communications, and retail. Tourism is one of the country’s most important sectors, bringing in billions of dollars every year. However, the sector suffered enormously in the last couple of years due to the pandemic. Still, the tourism sector experienced a significant growth in 2022, - with the entry of tourists in the country growing by 72% in January 2022 in relation to the same month in 2021 - a path which it is set to continue on in the coming years.
Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
---|---|---|---|
Employment By Sector (in % of Total Employment) | 31.3 | 18.7 | 50.0 |
Value Added (in % of GDP) | 9.4 | 22.2 | 62.1 |
Value Added (Annual % Change) | 3.5 | 8.5 | 8.1 |
Source: World Bank - Latest available data.
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Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
---|---|---|---|---|---|
Guatemala Quetzal (GTQ) - Average Annual Exchange Rate For 1 MUR | 0.21 | 0.21 | 0.22 | 0.22 | 0.20 |
Source: World Bank - Latest available data.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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Regional integration is a priority of Guatemalan foreign policy, and trade represents 49.9% of GDP. However, poverty, violence, and political uncertainty remain the greatest obstacles to increased trade. Guatemala is the 92nd largest exporter and the 75th largest importer in the world. The country mainly exports bananas (6.8%), coffee (6.8%), palm oil (5.1%), nutmeg (4.8%), and cane or beet sugar (3.7%); while imports include petroleum oils (11.6%), motor vehicles (4.7%), telephone sets (3.1%), and medicaments (2.5%).
Guatemala's main trade partners are the United States, El Salvador, Mexico, China, Honduras, Nicaragua, and Costa Rica. Guatemala is one of five countries in the Central American Common Market (CACM) along with Costa Rica, El Salvador, Honduras, and Nicaragua. The country is also a member of Central American Integration System (SICA). The European Union supports this integration process, which was one of the conditions of an agreement between the two regions. Guatemala is, after Nicaragua, the second largest recipient of European cooperation aid in Central America and benefits from the Generalised Scheme of Preferences.
In 2021, exports of goods reached USD 13.7 billion, while imports stood at USD 26.6 billion. As for services, Guatemala imported USD 4.2 billion, while exported USD 2.9 billion. Overall imports registered a 22.1% increase from the previous year, and exports grew by 11.7% over the same period. As a result, Guatemala had trade deficit of USD 10.8 billion concerning the trade of goods, which is slightly lower than the overall trade deficit including services, which amounted to USD 12 billion.
Foreign Trade Indicators | 2017 | 2018 | 2019 | 2020 | 2021 |
---|---|---|---|---|---|
Imports of Goods (million USD) | 18,388 | 19,699 | 19,882 | 18,205 | 26,607 |
Exports of Goods (million USD) | 10,990 | 10,769 | 11,175 | 11,521 | 13,753 |
Imports of Services (million USD) | 3,204 | 3,470 | 3,551 | 2,752 | 4,214 |
Exports of Services (million USD) | 2,772 | 3,605 | 3,601 | 2,527 | 2,906 |
Imports of Goods and Services (Annual % Change) | 2.8 | 3.9 | 5.0 | -5.7 | 22.1 |
Exports of Goods and Services (Annual % Change) | 1.5 | -0.4 | 0.2 | -7.7 | 11.7 |
Imports of Goods and Services (in % of GDP) | 27.6 | 28.8 | 27.9 | 24.8 | 32.1 |
Exports of Goods and Services (in % of GDP) | 18.5 | 18.2 | 17.6 | 16.3 | 17.8 |
Trade Balance (million USD) | -6,791 | -7,985 | -7,967 | -6,314 | -10,887 |
Trade Balance (Including Service) (million USD) | -6,500 | -7,819 | -7,929 | -6,554 | -12,070 |
Foreign Trade (in % of GDP) | 46.1 | 47.0 | 45.5 | 41.2 | 49.9 |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
Main Customers (% of Exports) |
2022 |
---|---|
United States | 32.3% |
El Salvador | 13.0% |
Honduras | 10.0% |
Nicaragua | 6.3% |
Mexico | 4.4% |
See More Countries | 34.0% |
Main Suppliers (% of Imports) |
2022 |
---|---|
United States | 32.0% |
China | 18.2% |
Mexico | 10.1% |
El Salvador | 3.3% |
Costa Rica | 2.5% |
See More Countries | 33.8% |
Source: Comtrade, Latest Available Data
Source: Comtrade, Latest Available Data
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3.0 bn USD of services exported in 2019 | |
---|---|
41.00% | |
Personal travelPersonal travel | 33.21% |
Business travelBusiness travel | 7.79% |
21.67% | |
16.09% | |
12.63% | |
3.47% | |
2.67% | |
1.33% | |
0.57% | |
0.55% | |
0.02% |
3.7 bn USD of services imported in 2019 | |
---|---|
43.25% | |
22.34% | |
Personal travelPersonal travel | 17.56% |
Business travelBusiness travel | 4.78% |
8.77% | |
7.76% | |
6.63% | |
5.86% | |
2.26% | |
1.66% | |
1.13% | |
0.34% |
Source: United Nations Statistics Division, Latest Available Data
- National Unity of Hope Party (UNE): centre-left, Christian, nationalist
- Vamos: right-wing, conservative, liberal
- Valor: right-wing, conservative, populist
- Commitment, Renewal and Order (CREO): centre-right, nationalist, conservative
- Guetemalan National Revolutionary Unity (URNG): left-wing to far-left, socialist, populist
- National Convergence Front (FCN): right wing, nationalist, conservative
- Vision With Values (ViVa): right wing, Christian
- National Advancement Party (PAN): right-wing, conservative
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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Latest Update: September 2023