Guatemala: Growth Projections Improve

The behavior of credit to the private sector, public spending, imports and remittances would explain the higher growth expected for the economy this year.

Friday, February 22, 2019

The Bank of Guatemala (Banguat) reported that this year's economic growth is projected to range between 3% and 3.8%, with a central value of 3.4%, up from the 3.1% reported during 2018.

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Regarding the behavior of the local economy at the beginning of the year, Sergio Recinos, president of Banguat, told Elperiodico.com.gt that "... In January, public spending increased because of the transfer of resources to the Supreme Electoral Tribunal (TSE) for the elections to be held in June, and for spending on education. But the trend is expected to continue in the following months as this is the last year of this administration."

The construction sector would be one of the economic activities that would drive growth in 2019. The article adds that "... Also, the implementation of the one-stop shop will accelerate the authorization of square meters of construction, which will have an impact this year."

According to forecasts by the Economic Commission for Latin America and the Caribbean (ECLAC), in 2019 Panama will be the economy with the highest growth in Central America, with a 5.6% expected rate. It would be followed by Honduras, with a 3.6% growth forecast for GDP, Guatemala with 3%, Costa Rica with 2.9% and El Salvador, with an increase of 2.4%. Only in Nicaragua is the economy expected to contract. According to ECLAC, GDP will fall by 2%.

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