Uncertainty about Slow Progress in the Vaccination Process

Although expectations for the end of 2021 are good for the Guatemalan economy, there is uncertainty regarding what will happen in the second part of the year, as the vaccination process is progressing slowly.

Friday, June 25, 2021

According to World Bank forecasts published in June 2021, it is expected that at the end of the year, Guatemala's Gross Domestic Product will grow 3.6% year-on-year. See report "Global Economic Prospects".

Local institutions also report a good performance of the economy, since according to estimates of the Bank of Guatemala, in April 2021 the Monthly Index of Economic Activity reported an increase of 12% with respect to the level recorded in the same month of 2020.

Despite the fact that the main indicators and forecasts show a favorable outlook, the business sector is of the opinion that the outlook could change if the implementation of the vaccination plan against Covid-19 is not accelerated.

Juan Carlos Zapata, executive director of the Foundation for the Development of Guatemala (Fundesa), told Prensalibre.com that "... although the country has been recognized for its macroeconomy and according to the International Monetary Fund (IMF), a 4.5% growth is expected for 2021, there is concern that the outlook could change due to the slow progress of the vaccination against the coronavirus."

On June 9, the IMF reported that during 2020 Guatemala's economy showed resilience, as in the context of the crisis caused by the Covid-19 outbreak, the GDP contracted only 1.5%.

Fernando Spross, Fundesa's analyst, explained that "... it is also expected that if Standard and Poor's confirms Guatemala's rating, it would be positive and would contribute to a good growth perspective for this year, but also those rating agencies are paying attention to the vaccination process."

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