Political Situation Affects Business Confidence

For the Guatemalan private sector, the uncertainty that prevails in the country is because the details of the government programs of the political parties that will participate in the General Elections are not known until now.

Wednesday, April 10, 2019

Last March 18 officially began the political campaign for the General Elections in the country, but the legal inconveniences faced by some candidates for the presidency cause doubts in the future, since there is no clarity of who will participate in the process and the government plans of the candidates are not known in depth.

See "Elections and Economic Uncertainty"

In this political context, business expectations remain low, since reports from the Banco de Guatemala specify that after February 2019 the Confidence in Economic Activity Index in Guatemala reported year-on-year decrease of 8%, in March the variation was -6% regarding the same month in 2018.

Also see "Business Confidence Not Rebound"

Rubén Hidalgo, director of the Central American Institute of Political Studies (Incep), explained to Prensalibre.com that "... the result (of the Index of Confidence in Economic Activity) that is presented is the effect of the electoral campaign and that it responds to the political environment. At this moment the uncertainty of the possible investors is put in the development of the elections and who could be the winner."

On the other hand, Pedro Barnoya, director of the Association of Binational Chambers of Guatemala (Ascabi), explained that "... in the business environment the uncertainty is breathed by the general elections, after a period of continuous crisis that have been presented in recent months by the conflict Cicig-Government, migrants and until which political candidates will be able to participate or not. It is time for political parties to present their government programs, especially economic ones, and so far there is nothing clear to generate confidence.

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More on this topic

Political Environment Favors Business Confidence

December 2019

The electoral triumph of Alejandro Giammattei and the appointments he is making in his cabinet to assume next January 14, are the main reasons that explain the upturn that has had business confidence since July.

In November of this year, the Index of Confidence in Economic Activity reported a 28% growth with respect to the same month in 2018, a performance that reinforces the upward trend that has been registered since July 2019.

Business Optimism on Election Day

May 2019

Two weeks before the General Elections in Guatemala, the business sector perceives a favorable environment for business because of the behavior of the country's economic activity.

According to the Business Perception Survey, compiled by the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (Cacif), 67% of the consulted businessmen foresee stability in employment and 50% thought that there is a stable economic environment for companies. These expectations of the private sector are reported in the final stretch of the country's electoral process.

Elections and Economic Uncertainty

March 2019

On March 18, the political campaign for the General Elections in Guatemala officially began, but the legal inconveniences faced by some candidates cause doubts for the future.

Zury Ríos, Thelma Aldana and Sandra Torres are the three presidential candidates leading the voting intentions for the 2019 General Elections, but both Ríos and Aldana have had legal problems in their registration process, and Torres, already a registered candidate, was accused of illegal electoral financing. These cases have caught the public's attention and prevented them from knowing the concrete economic proposals.

Which Changes are Foreseen in 2019?

December 2018

Although some uncertainty is projected next year in Guatemala, because of the presidential and legislative elections scheduled for June, it is estimated that the economy will increase 3.2%.

According to the Center for National Economic Research (Cien), it is expected that in 2019 there will be some uncertainty derived from the changes in the three branches of government.

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