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flag Guatemala Guatemala: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

The violence caused by organized crime, drug traffickers and impunity, but also by inequality and poverty (which affects more than half of the population), is the main problem facing the country. Guatemala often suffers from natural disasters (volcanoes, hurricanes, earthquakes), nevertheless has a significant potential for tourism, agriculture, hydrology and mineral extraction.

Since 2011, the Guatemalan economy, which had been with Panama the only country to have avoided a recession in 2009, has shown economic indicators reflecting good macroeconomic and financial stability. The resumption of international trade and the measures adopted by the government allowed the economy to grow regularly (3.3% in 2013 after 3.1% in 2012). Guatemala is being overdependent on its trade relations with the United States, but the country is amongst those who have most improved their business environment.

Raising the level of budgetary resources is essential to enable the country's development through investment in physical infrastructure as well as in the social sectors. However, the tax burden remains at only 10% of GDP. Reforming the tax system should enable the state to improve tax collection and deal with its current deficit. The country faces many challenges, including crime and corruption, which represent barriers to tourism and business. Inflation was down to 4% in 2013, and unemployment and underemployment remained high in 2013 (despite the official figure of 3.8%) in this country where 74% of the active population is working in the informal sector.

On the social level, Guatemala faces a difficult situation: more than half of the population lives below the poverty line (55% in 2013), the country has one of the highest rates of malnutrition in the world, and there is a strong inequality in income.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 47.6650.3953.80e58.3062.63
GDP (Constant Prices, Annual % Change) 4.23.03.7e3.4e3.7
GDP per Capita (USD) 3,234e3,336e3e3,674e3,850
General Government Gross Debt (in % of GDP) 23.724.324.624.825.3
Inflation Rate (%) 6.23.84.33.5e4.3
Current Account (billions USD) -1.60-1.31-1.47e-1.19e-1.39
Current Account (in % of GDP) -3.4-2.6-2.7-2.0-2.2

Source: IMF - World Economic Outlook Database ; CIA - The world factbook , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The agricultural sector accounts for 13.5% of the GDP and employs 28.2% of the active population. It accounts for over 70% of the country's exports.

The country produces and exports mainly coffee, sugar, bananas, cotton, rubber, cardamom and a variety of precious woods and exotic fruits. The country has a small mining industry and extracts copper, zinc, iron and nickel.

The industry sector accounted for 23.8% of the GDP in 2013, employing around 25% of the population. It stands mainly from textiles, paper industries, pharmaceutical products, as well as rubber transformation industries. It has to be noted that since Guatemala's entry into the Free Trade Area of the Americas (FTAA) created by the United States, the advantages in customs have brought an increment in investments and the establishment of American companies in the country.

The service sector represents the largest part of the GDP, accounting for 62,7%. The tourism industry is very dynamic and continues to grow.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 32.3 19.5 48.2
Value Added (in % of GDP) 11.3 29.0 59.7
Value Added (Annual % Change) 4.7 2.8 3.6

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Guatemala Quetzal (GTQ) - Average Annual Exchange Rate For 1 USD 8.168.067.797.837.86

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Guatemala on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

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, labor 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.

Score:
61.2/100
Position:
Moderately Free
World Rank:
83/178
Regional Rank:
17/29

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Foreign trade represents more than 50% of the Guatemalan GDP.  Guatemala is one of the five countries of the Central American Common Market (CACM) along with Costa Rica, El Salvador, Honduras and Nicaragua. The FTAA  (or ALCA) agreement was signed by Guatemala in 2004. This agreement is characterized by an advantageous customs union for the Central American countries, Mexico, the United States and Canada.

The United States is the country's indispensable trading partner. It was the largest client and supplier in 2013, as well as the second largest bilateral provider of development assistance (behind Spain) and receives about 1.4 million Guatemalan emigrants whose remittances accounted for over 9.5% of GDP in 2013.

The main exports are coffee, sugar, oil, textiles, fruits and vegetables and cardamom. The main clients of Guatemala in 2013 were the United States (more than 40% of export), El Salvador, Honduras, Mexico and Costa Rica.

The main import partners are the United States (38% in 2013), Mexico, China (becoming an increasingly important trade partner) and the EU. The country's trade balance is structurally in deficit, a trend that should continue in 2014 with in particular the stagnation of exports.

Regional integration is a priority of the Guatemalan foreign policy. The country is a member of Integration in Central America (SICA). The European Union supports this integration process and it was one of the conditions of a bi-regional agreement. Guatemala is, after Nicaragua, the second largest recipient of European cooperation in Central America and benefits from the communitarian Generalized System of Preferences.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 11,53113,83816,61316,99417,510
Exports of Goods (million USD) 7,2148,46310,4019,98310,162
Imports of Services (million USD) 2,0582,3622,3672,3582,498
Exports of Services (million USD) 1,8182,1922,1522,2532,355
Imports of Goods and Services (Annual % Change) -7.810.07.02.84.4
Exports of Goods and Services (Annual % Change) -2.76.13.01.85.3
Imports of Goods and Services (in % of GDP) 33.136.337.436.135.0
Exports of Goods and Services (in % of GDP) 24.025.826.624.923.7
Trade Balance (million USD) -3,348-4,271-4,963-5,735-6,165
Trade Balance (Including Service) (million USD) -3,391-4,410-5,241-5,839-6,367
Foreign Trade (in % of GDP) 57.162.164.061.058.6

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
United States 38.4%
El Salvador 11.0%
Honduras 7.9%
Nicaragua 4.8%
Mexico 4.7%
See More Countries 33.2%
Main Suppliers
(% of Imports)
2013
United States 37.2%
Mexico 10.6%
China 8.2%
El Salvador 4.7%
Colombia 4.4%
See More Countries 34.9%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Cane or beet sugar and chemically pure sucrose, in...Cane or beet sugar and chemically pure sucrose, in solid form 9.4%
Coffee, whether or not roasted or decaffeinated;...Coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes containing coffee in any proportion 7.1%
Bananas, incl. plantains, fresh or driedBananas, incl. plantains, fresh or dried 6.5%
Women's or girls' blouses, shirts and...Women's or girls' blouses, shirts and shirt-blouses, knitted or crocheted (excl. t-shirts and vests) 4.5%
Precious metal ores and concentratesPrecious metal ores and concentrates 4.5%
See More Products 68.0%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 16.4%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.7%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.2%
Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 2.1%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 1.7%
See More Products 74.9%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2012
60.56%
14.26%
12.85%
3.93%
3.84%
2.43%
0.90%
0.81%
0.30%
0.13%
- bn USD of services imported in 2012
51.96%
29.32%
8.23%
3.51%
2.21%
2.21%
1.50%
0.50%
0.38%
0.17%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Ministry of Economy (Spanish only)
Ministry of Public Finance (Spanish only)
Chamber of Industry (Spanish only)
Chamber of Commerce (Spanish only)
Statistical Office
National Institute of Statistics (Spanish only)
The Secretariat of Central American Economic Intergration
Central Bank
Central Bank of Guatemala (in Spanish)
Bank supervision (Spanish only)
Stock Exchange
Guatemala Stock Exchange (Spanish only)
Search Engines
Guatemalaweb
Guatemarket.com
Yahoo directory
Yahoo.es
Economic Portals
Deguate (Spanish only)

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Political Outline

Executive Power
President is both the chief of State and head of government. He holds the executive powers which include implementing the law and running the day-to-day affairs. The Council of Ministers is appointed by the President. The president is elected by popular vote for a term of four years.
Legislative Power
The Guatemalan legislative power is unicameral. Parliament, known as the Congress of the Republic, has 158 members who are elected by popular vote for a term of four years. The country's constitution provides for the separation of executive, legislative, and judiciary powers. The president cannot dissolve the parliament however, he has the power to veto acts of parliament which in turn can be overridden by a legislative supermajority.
Main Political Parties
Guatemala has a multi-party system, with 2 or 3 strong parties. The main political parties are follows:
- UNE: (National Unity for Hope) - a left-wing, nationalist gathering of political parties. It is currently the majority party; and has 30% of the parliamentary seats. It is the actual president's party.

- GANA: (Grand National Alliance) - which currently has 23% of the parliamentary seats.
- PP: (Patriotic party - nationalist party), it has 19% of the parliamentary seats.
- Then the FRG (Guatemalan Republican Front) (9%), conservative, whose electorate base is found in the rural population and the PU ( Union Party), 5%.  There are a myriad of other parties which collectively account for the remaining 14% of the seats.

Current Political Leaders
President: Otto PEREZ Molina (since January 14th, 2012) - Patriot Party
Vice President: Roxana BALDETTI Elias (since 14 January 2012) - Patriot Party
Next Election Dates
Presidential: 2015
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the 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 sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. 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.).

World Rank:
125/180
Evolution:
30 places down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

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.

Ranking:
Partly Free
Political Freedom:
3/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: January 2015