For the international organization, during 2020, Guatemala's economy showed resilience, since in the context of the crisis caused by the Covid-19 outbreak, the GDP contracted only 1.5%.
According to the International Monetary Fund, in a context of favorable specialization of production and exports, resilience of remittances, and unprecedented support from monetary and fiscal policies, the drop in Guatemalan production was minimal compared to that reported in other Central American countries.
Twelve months after Central America began a health and economic crisis triggered by the covid-19 outbreak, Guatemala was the fastest recovering economy and Panamanian economic activity is the slowest to return to pre-pandemic levels.
In March 2020, the first cases of covid-19 began to be detected in the countries of the region. The highly contagious disease, which at that time had already claimed the lives of thousands of people around the world, forced Central American governments to establish mobility restrictions.
During January of this year, the Monthly Index of Economic Activity reported a 3.2% increase compared to the level reported in the same month of 2020.
The Guatemalan economy continues to show positive signs, since after facing a crisis during 2020 due to the covid-19 outbreak, economic activity has recovered quickly in recent months.
After seven months of reporting drops in production levels, which were caused by the crisis generated by the covid-19 outbreak, during October the Monthly Index of Economic Activity registered a 1.3% year-on-year variation.
The health emergency led to a severe economic crisis, which began to become evident in March, when the Monthly Index of Economic Activity (IMAE) fell 5% year-on-year.
In the critical context of this year, the resilience of remittances and exports, added to the decline in oil prices, would have somewhat shielded the Guatemalan economy, whose GDP would fall only 2% by the end of 2020.
The programs in response to Covid-19 (Bono Familia, Fondo de Protección al Empleo, Fondo de Crédito para Capital de Trabajo), along with the temporary restructuring of loans by the banking system, are helping to sustain household income and business liquidity, the multilateral agency reported after making its last visit.
As of June, Central American economies began to show signs of incipient recovery and as of August, Guatemala, Nicaragua and Costa Rica registered the smallest drops in their levels of economic activity.
Since March of this year, the region has faced a severe economic crisis generated by the outbreak of covid-19. The strict quarantines decreed, the closure of borders and commercial establishments, ended up damaging the dynamism of productive activities.
The World Bank projects that the Central American economy will contract by 3.6% this year, due to restrictions on movement, a decline in remittances and tourism, and a drop in agricultural prices.
The sudden and widespread impact of the coronavirus pandemic and the measures taken to contain it have caused a drastic contraction in the global economy, which, according to World Bank forecasts, will shrink by 5.2% this year, the bank reported on June 8.
After the economies of the region grew by 2.6% in 2018 as a whole, the IMF estimates that 2019 would close with a rise of 2.7% and could reach 3.4% by 2020.
The document "World Economic Outlook", prepared by the International Monetary Fund (IMF), states that for Panama the projected growth of the Gross Domestic Product (GDP) for 2019 was reduced from 5% to 4.3%.
After economic activity in April reported a 2.8% year-on-year growth, in May the variation was 3.3%, mainly because of the behavior of commercial activity.
The document prepared by the Banco de Guatemala explains that "... The economic activity measured by the estimation of the IMAE in May 2019, showed a 3.3% growth rate (3.8% in May 2018).
The described behavior was influenced by the growth shown by the following economic activities: Wholesale and retail trade; manufacturing industries; private services; and agriculture, livestock, hunting, forestry and fishing.
Transport, storage and communications, and private services, explained part of the 3% year-on-year increase reported in the Gross Domestic Product during the first three months of the year.
The growth of the Transportation, storage and communications activity, was mainly associated to the increase of the telecommunications activity, derived from the increase of broadband accesses and the greater number of mobile phone subscribers, congruent with the registered by the telephony companies, informed the Banco de Guatemala.
For the entity, "growth has been accelerating since mid-2018 after three years of weak performance," and a variation of 3.4% of GDP is expected for 2019.
Backed by a positive fiscal boost, the recovery of exports after last year's decline resulting from a deterioration in the terms of trade, and the dynamism of private investment. Growth would peak at 3.7% in 2021, before converging towards the potential rate of 3.5% by 2024, the International Monetary Fund reported after its last visit to the country.
"The tightening of global financing conditions is a concern for Central American countries with large current account deficits or those highly dependent on capital flows."
According to the report "World Economic Outlook - January 2019" compiled by the World Bank (WB), countries with a high external debt burden would be at risk if a sudden change in investor confidence in emerging market and developing economies were to occur.
The Bank of Guatemala expects next year's economic growth to be better than in 2018, which would be caused by higher public spending and the growth of family remittances.
Authorities of the Bank of Guatemala (Banguat) informed that the Guatemalan economy will close 2018 with a nearly 3% growth, however, for next year is expected that the increase in GDP will be in the range between 3% and 3.8%.
During October, economic activity in Guatemala reported a 3.3% increase over the same month in 2017, mainly because of the performance of private services and wholesale and retail trade.
The Banco de Guatemala (Banguat) reported that the economic activity according to the IMAE estimation, in October 2018, showed a 3.3% growth rate (3.7% in October 2017).
Arguing that the behavior of the main indicators of the local economy are consistent with those expected, Banco de Guatemala has decided to maintain the monetary policy rate at 2.75%.
From a statement issued by the Bank of Guatemala:
Guatemala, September 27, 2018.The Monetary Board, in its session held on September 26, based on a comprehensive analysis of the external and internal economic situation, after evaluating the Balance of Inflation Risks, decided to maintain the level of the leading monetary policy interest rate at 2.75%.