The Central Bank has reduced the outlook for economic growth this year, arguing that there has been a slow recovery of the global economy and a slowdown in some sectors at the local level.
The Bank of Guatemala has reduced the expected growth rate for 2017 from a range of 3% to 3.4% to a range between 3% and 3.4%.At the local level it is estimated that one ofthe activities that will show reduced performance is construction, whose expected growth rate fell from 3.6% to 3.4%.
The Bank of Guatemala projects a slight downward trend in interest rates in the banking system in 2017 and growth of between 7% and 10% in credit to the private sector.
From the report "Performance in 2016 and Prospects for 2017" by the Bank of Guatemala:
Growth in economic activity, as measured by gross domestic product in real terms, is estimated to have grown 3.1% in 2016; while in 2017 it will grow in a range of between 3.0% and 3.8%, close to the average growth in 2011-2016 with positive growth in almost all economic activities, both in 2016 and in 2017.
The Bank of Guatemala has left the monetary policy rate unchanged, citing uncertainty and weakness in the international context, and expects growth of 4.9% in GDP in 2017.
In the domestic environment the Bank of Guatemala (Banguat) stressed that economic activity continues to record behavior consistent with the target range for 2016 (between 3.1% and 3.7%), which is reflected in the evolution of severaleconomic activity indicators (Monthly Index of economic activity, bank credit to the private sector in domestic currency, volume of imports and remittances, among other things).
Guatemala´s handling of a serious political crisis through legal means and confidence in the incoming government has allowed it to close 2015 with stable growth of 4.1%.
The Bank of Guatemala reports that "... Economic activity continues to perform in a manner consistent with the range of annual economic growth forecast for 2015, which is reflected, among other indicators, in the evolution of the IMAE, remittances and bank loans to the private sector. Although inflation continues to be influenced by the fall in international prices of oil and its derivatives, to the extent that this effect fades, inflation will start to converge to the central value of the target. "
Mining and quarrying reported a growth of 47.5%, financial intermediation and insurance 7.8%, supplies of electricity and water 5.2% and construction 4.6%.
According to a report by the Bank of Guatemala (Banguat), economic performance in the last three months of 2014 was 4.4%, while the Gross Domestic Product (GDP) grew by 4.2% at the end of that year, being the same level reported in 2011.
Increased borrowing costs, a disincentive to foreign investment and distrust of economic performance, are part of the expected scenario if public debt growth is not controlled.
Prensalibre.com reports that "... The draft budget for 2015 presented by the Ministry of Finance, amounting to $9.250 million (Q71 thousand 840.8 million), contemplates taking on new debt of about $2 billion (Q15 billion), of which $1.6 billion (Q12 thousand 334 million) came from bonds and loans. "
During 2013 the Guatemalan economy continued to recover and show dynamism in most sectors in the country.
The Monetary Authority of Guatemala notes that in 2013 the country had a satisfactory rate of economic activity consistent with the recovery that has been seen in the world economy.
The entity predicts a robust 2014 with a strengthening of economic activity domestically, mainly driven by an acceleration in world trade, in which Guatemala is immersed.
The cost of electricity, resistance to mining and hydroelectric activities, difficulties in setting up businesses and few productive chains are the obstacles to be overcome in 2013.
An article in Prensalibre.com reports that analysts agreed that "the high cost of electricity, the existing conflict with the development of new hydroelectric and mining projects and the reduction in costs for the registration of new companies are among the main challenges facing the country's economy. "
The Fourth State of the Region Report examines the society, demography, economy, environment, and political integration of the seven Central American countries.
The Fourth State of the Region report is divided into four sections and ten chapters.
The first section is entitled "Regional Overview", and its main purpose is to track recent developments in Central America based on a platform of comprehensive and current indicators.
The annual publication by the Bank of Guatemala contains statistical information compiled from various sources, including general indicators of real, external, monetary, financial and fiscal sectors.
Presentation of the document:
The Bank of Guatemala’s mission is to promote stability in the general price level in the country. In order to fulfil its primary objective, the institution requires a wide range of resources, among which is statistical information.
The global recovery is off to a stronger start than anticipated earlier but is proceeding at different speeds in the various regions.
A Policy-Driven, Multispeed Recovery
Following the deepest global downturn in recent history, economic growth solidified and broadened to advanced economies in the second half of 2009. In 2010, world output is expected to rise by 4 percent.
The global recovery is off to a stronger start than anticipated earlier but is proceeding at different speeds in the various regions.
A Policy-Driven, Multispeed Recovery
Following the deepest global downturn in recent history, economic growth solidified and broadened to advanced economies in the second half of 2009. In 2010, world output is expected to rise by 4 percent.
FMI: "Recessions associated with financial crises tend to be severe. Recoveries from such recessions are typically slow."
If such recessions are globally synchronized then they tend to last even longer and be followed by recoveries that are even weaker.
Countercyclical policies can be helpful in ending recessions and strengthening recoveries. In particular, expansionary fiscal policies seem particularly effective.
FMI: "Recessions associated with financial crises tend to be severe. Recoveries from such recessions are typically slow."
If such recessions are globally synchronized then they tend to last even longer and be followed by recoveries that are even weaker.
Countercyclical policies can be helpful in ending recessions and strengthening recoveries. In particular, expansionary fiscal policies seem particularly effective.