Guatemala

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

Guatemala’s economy has been shattered by the civil war for many years. However, recovery has started in 2004 with a GDP growth rate of 3.2% which further improved to 3.5% in 2005, thanks mainly to public & private spending and transfer of money by expatriates. GDP growth has reached 4.9% and 4.8% in 2006 and 2007. 4.3% are predicted for 2008 by the IMF. Rise in international oil prices resulted into an increase in inflation which touched 9.1% in 2005 but is estimated to have cooled down to 6.9% in 2006. The inflow of foreign investments has been hampered by unstable political and social environment, combined with corruption and drugs problems. 60% of the country’s population lives below the poverty line.

GDP Indicators	2004	2005	2006	2007	2008
GDP (billions USD)	23.96	27.41	30.30	33.32e	35.27e
GDP (constant prices, annual % change)	3.2	3.5	4.9	4.8e	4.3e
GDP per capita (USD)	1,971.34	2,157.94e	2,333.68e	2,503.79e	2,585.57e
Inflation rate (%)	7.6	9.1	6.6	6.2e	6.1e
Unemployment rate (% of the labor force)	3.1	n.c.	n.c.	n.c.	n.c.
Current Account (billions USD)	-1.21	-1.39	-1.56	-1.70e	-1.65e
Current Account (in % of GDP)	-5.1	-5.1	-5.2	-5.1e	-4.7e

Source: IMF - World Economic Outlook Database; ILO, Laborstat - Yearly Statistics

Note: (e) Estimated data

Socio-demographic indicators	2004
Unemployment rate (%)	3.1

Source:

Main sectors of industry

Guatemala has mainly agricultural economy. Agriculture accounts for 23% of the GDP and 75% of the country's exports. The major commercial and export crops are sugar, banana, coffee and cocoa. However agriculture is prone to climatic risks such as cyclones. Forest exploitation is not much developed. There is some manufacturing activity in the country, primarily that of refined sugar, textiles and clothing, furniture, and chemicals. Industry contributes nearly 19% to the GDP. "Maquiladoras", which are textile or clothing factories established in free zones and having a privileged access to the American market, are developing. There are good deposits of zinc, lead and nickel in the country. Extensive jade deposits are found in the central part of Guatemala. The petroleum industry has developed, although it has been limited by political unrest and environmentalist opposition. The tourism industry is very dynamic; especially the Mayan town of Chichicastenango is a popular site for the tourists. Banking sector is weak. The services sector contributes nearly 60% to the GDP.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	3.5	4.0	5.2
Value added (in % of GDP)	22.7	19.0	58.3
Employment by sector (in % of total employment)	38.7	20.0	37.5

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2002	2003	2004	2005	2006
Average annual exchange rate for 1 USD	7.82	7.94	7.95	7.63	7.60

Source: World Bank - World Development Indicators

Foreign trade in figures

Guatemala is one of Central American Common Market (CACM)'s five countries, along with Costa Rica, Salvador, Honduras and Nicaragua. A free-trade agreement was signed on May 2004 between CACM's five countries and the USA. Guatemala's top three export partners are: the U.S.A., El Salvador and Honduras. The country mainly exports apparel & clothing accessories, coffee & tea, fruits & nuts, and mineral fuels & oils. The top three import partners are: the USA, Mexico and China. The goods mainly imported are mineral fuels & oils, vehicles, electric & mechanical equipment, machinery, and plastic articles.

Foreign trade indicators	2002	2003	2004	2005	2006
Imports of goods (millions USD)	5,791	6,176	7,175	8,070	n.c.
Exports of goods (millions USD)	2,819	3,060	3,368	3,701	n.c.
Imports of services (millions USD)	1,066	1,126	1,308	1,477	n.c.
Exports of services (millions USD)	1,145	1,059	1,178	1,238	n.c.
Imports of goods and services (annual % change)	9.6	2.5	7.2	1.4	13.6
Exports of goods and services (annual % change)	-5.7	-1.3	6.6	-1.1	12.5
Imports of goods and services (in % of GDP)	29.5	29.4	31.1	30.2	31.9
Exports of goods and services (in % of GDP)	17.1	16.7	17.0	15.7	16.3
Trade Balance (millions USD)	-2,972	-3,116	-3,808	-4,370	n.c.
Trade Balance (including service) (millions USD)	-2,893	-3,183	-3,937	-4,608	n.c.
Current Account (millions USD)	-1,235	-1,039	-1,211	-1,387	n.c.
Current Account (in % of GDP)	-5.3	-4.2	-4.4	-4.4	n.c.
Foreign trade (in % of GDP)	46.6	46.1	48.1	45.9	48.2

Source: World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2006
United States	31.4%
El Salvador	15.3%
Honduras	9.7%
Mexico	5.4%
Nicaragua	4.4%

Main suppliers (% of imports)	2006
United States	38.8%
Mexico	9.1%
China	4.8%
Brazil	3.9%
Panama	3.8%

Source: 2006

Main products

Main exports (% of exports)	2006
Coffee, tea and spices	17.2%
Sugars	10.9%
Mineral fuels, mineral oils	8.8%
Edible fruit and nuts, peel of citrus fruit or melons	8.2%
Rubber	3.6%

Main imports (% of imports)	2006
Mineral fuels, mineral oils	19.5%
Vehicles other than railway or tramway	10.3%
Electrical machinery and equipment	9.7%
Machinery and mechanical appliances	9.2%
Plastics	5.2%

Source: 2006

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of economic information

Ministries: http://www.mineco.gob.gt/">Ministry of Economy http://www.minfin.gob.gt/">Ministry of Publics Finances
Statistical Office: http://www.ine.gob.gt/">National Institute of Statistics
Central Bank: http://www.banguat.gob.gt/default.asp?lang=2">Central Bank of Guatemala
Stock Exchange: http://www.bvnsa.com.gt/nuevositio/index.php">Guatemala Stock Exchange
Online newspapers: http://lahora.com.gt/">La Hora (in Spanish)
http://www.prensalibre.com/pl/2008/abril/01/index.html">Prensa Libre (in Spanish)
http://www.sigloxxi.com/">Siglo XXI (in Spanish)
Search Engines: Istaminia Guatemala
Guatemalaweb
Guatemarket.com
Dmoz.org
Google.es

Political outline

Executive Power: President is both the chief of the state and head of the government. President holds the executive powers which include implementation of the law in the country and running the day-to-day affairs. Both President and Vice-President are elected by popular vote for a four-year term. Council of Ministers (the cabinet) is appointed by the President.
Legislative Power: The legislature in Guatemala is unicameral. The parliament called Congress of the Republic has 158 members which are elected by popular vote to serve four-year terms. The country's constitution provides for a separation of powers among the executive, legislative, and judiciary. President cannot dissolve the parliament; however the President has the power to veto acts of the parliament which in turn can be overridden by supermajority of legislators. The people of Guatemala have limited political rights.
Main political parties: Guatemala has a multi-party system, with 2-3 strong parties. The main political parties in the country are:
- GANA (Grand National Alliance)-consisting of PP (Patriotic Party-a nationalist party), MR (Reform Movement - advocates economic & political reforms) and PSN (National Solidarity Movement - right-wing, draws support from younger generation);
- UNE (National Unity for Hope) - a left-wing, nationalist gathering of political parties;
- FRG (Guatemalan Republican Front) - conservative, draws strong support from country's rural community.
Current political leaders: President: Alvaro COLOM Caballeros (since January 2008) - UNE
Vice President: Rafael ESPADA (since January 2008)
Next election dates: Presidential: September 2011
Parliamentary: September 2011