Construction and Remittances: Drivers of the Economy

According to the Central Bank, the constructive activity and consumption spending that Guatemalans make with the money received from abroad will boost the economy by the end of 2019, and this expansive cycle could extend until 2020.

Friday, November 22, 2019

During this year residential and commercial construction, together with public investment, have affected activities such as manufacturing, mining and quarrying, private services and commerce, informed representatives of the Bank of Guatemala (Banguat).

In this context, remittances have come to add to the economic dynamics of the country, since from January to October 2019, remittances to the country totaled $8.747 million, surpassing in 14% what was reported in the same period of 2018.

Alfredo Blanco, vice president of the Bank of Guatemala, told that by 2019 "... Construction is closing at 5.8%; mining and quarrying at 1.6%; trade at 3.7%; manufacturing, 3% and private services at 3.6%. By 2020 the general economic growth projection is 3% to 4%, although there are 'clouds on the horizon' of what could happen with the U.S. economy, which enters an electoral phase and a possible slowdown."

Regarding the global context that is emerging, Franco Uccelli, international analyst, explained that "... there could be a cooling in the global economy, as a result of situations in the United States, such as electoral and political uncertainty and the results of the trade conflict with China. The United States always moves the needle of the global economy and everything that happens there impacts everyone."

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More on this topic

Dominican Republic: Economic Activity Grows at 4.8%.

October 2019

During August 2019, the Monthly Economic Activity Index reported a 4.8% year-on-year increase, explained by the exploitation of mines and quarries and financial services.

The monthly indicator of economic activity (IMAE) shows a 4.8% growth in August 2019, maintaining the accumulated average expansion of the period January-August 2019 at 4.7%, which reflects that the Dominican economy has reacted favorably to monetary easing measures implemented from June this year, as expected by the Central Bank, informed the monetary authority.

Guatemala: Growth Projections Improve

February 2019

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

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.

Guatemala's Economy: 2019 Would Be Better

January 2019

The growth of family remittances, the recovery of credit to the private sector and the upturn in investment in capital goods would determine a better economic performance this year.

In a forum organized by the Chamber of Industry of Guatemala, representatives of the Bank of Guatemala (Banguat) and Central American Business Intelligence (CABI), agreed that this year the country's economy could register a better performance than in 2018.

Guatemala's Economy up to October 2014

October 2014

Economic activity grew by 4.3% at the end of the second quarter, with the sectors Agriculture and Private Services achieving the best results.  

From the report by the Bank of Guatemala:

In the second quarter of 2014, economic activity measured by estimating real GDP showed a growth of 4.3% (4.7% in the same quarter of the previous year) as a result of the growth recorded by components in demand, among which were private consumption expenditure, recovery of investment in fixed capital and the observed growth in the volume of exports and imports of goods and services.

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