Estudios Económicos


Population 17,3 million
GDP 4,545 US$
Country risk assessment
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major macro economic indicators

  2017 2018 2019 (e) 2020 (f)
GDP growth (%) 2.8 3.1 3.3 -3.0
Inflation (yearly average, %) 4.4 3.7 4.2 4.2
Budget balance (% GDP) -1.3 -1.7 -2.0 -2.4
Current account balance (% GDP) 1.5 0.8 0.6 0.6
Public debt (% GDP) 23.7 24.7 25.2 25.9

(e): Estimate. (f): Forecast.


  • Financial support from the US and multilateral lenders
  • Free trade agreements with the US and EU
  • Geographic proximity to the US and Mexico
  • High potential for tourism, agriculture (bananas, coffee, sugar), mining, hydroelectric and geothermal energy


  • Social and political instability
  • Poor infrastructure
  • Vulnerable to external shocks (natural disasters and commodity prices)
  • Heavily reliant on low value-added industry and expatriate remittances
  • Low fiscal revenues
  • Rural poverty, inequalities, under-employment, informal economy, ethnic divisions
  • Security issues related to drug trafficking

Risk assessment

Growth reliant on remittances from expatriates in the United States

Private consumption, which accounted for 88% of GDP in 2018, will continue to drive economic growth in 2020. Household consumption will be financed by remittances from expatriates in the United States. After several years of strong growth (+13.5% in the first nine months of 2019), these foreign exchange flows are expected to decelerate in 2020 amid a sharp slowdown in the United States and the tightening of the Trump administration's migration policy. With only 400,000 legal immigrants out of an estimated 2.7 million Guatemalans in the United States, President Trump's increase in border removals could affect this important source of household income. However, the accommodative monetary policy in place since 2013 (official rate set at 2.75%) coupled with the fact that inflation is contained in the central bank's target window (4%+/-1%) should stimulate domestic demand as a whole. When Alejandro Giammattei takes office in January 2020, public spending should be boosted to fulfil campaign promises (construction of health centres, schools, housing). However, the new administration will be constrained by the fragmented Parliament and the lack of agreement on the 2020 budget, which has led to the extension of the 2019 budget. Foreign direct investment in the construction sector is poised to increase as a result of recent reforms relating to building permits. However, uncertainty about possible retaliation by the United States in the event that the migrant pact is renegotiated should encourage investors to be cautious.

The agricultural sector is expected to rebound thanks to an increase in coffee prices following the decline in Brazilian production. However, the sector will remain exposed to climatic conditions. The mining sector will continue to suffer from legal disputes with indigenous populations over mining operations.


The approval of budgetary measures exposed to political struggles

The 2020 budget prepared by the previous administration was rejected by deputies at the end of November 2019 due to a lack of transparency and corruption attempts to obtain its approval. The new government of A. Giammattei will therefore have to work over the first few months with an adjusted 2019 budget to meet the new priorities, while complying with previous commitments, particularly in terms of salary increases. With one of the lowest revenue collection rates in the region, one of the priorities for the upcoming budget negotiations will be to increase revenue in the face of an increasing debt service burden (14% in 2018). The level of public debt remains very low compared to other countries in the region.

In 2020, the current surplus is expected to narrow as expatriate remittances weaken. These currency flows finance the trade deficit, which is expected to remain stable. The rise in coffee prices will drive external agricultural sales, offsetting the slowdown in US demand that will depress textile exports. Softer oil prices will counterbalance demand for capital and construction goods at the import level. In this context, foreign exchange reserves will remain comfortable – they stood at 8.4 months of imports in July 2019 – helping to support the Guatemalan quetzal.


A President who is powerless in the face of many challenges

Alejandro Giammattei, of the centre-right Vamos party, was elected in August 2019 and will take office in January 2020. He succeeded President Jimmy Morales, who was constitutionally barred from running for a third term. The campaign saw two of the main candidates eliminated by much criticised Supreme Court decisions a few months before the election. With public mistrust of politics running high, there is much expectation regarding President Giammattei’s action on corruption, after former President Jimmy Morales expelled the CICIG, the UN-backed anti-corruption commission, from the country following the launch of investigations into his relatives. However, the new President’s action on security, tax and social issues will be curtailed by Guatemala’s fragmented Parliament, where his Vamos party has only 16 seats out of 160.

From an international point of view, the main issue will be migration and the “safe third country” agreement with the United States signed by the Morales administration in the summer of 2019. This agreement requires migrantsen routeto the United States via Guatemala to submit their asylum application there and wait for the US administration to process their request. This agreement has been fiercely criticised given the country's challenging security situation. While he has spoken out against the agreement, President Giammattei has little room for manoeuvre to renegotiate after the United States threatened to tax expatriate remittances and cut development aid again if the agreement was not signed. The business environment remains deficient, with Guatemala ranking 96th out of 190 countries in the Doing Business 2020 ranking.


Last update : February 2020

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