It is estimated that by the end of 2019, Guatemalan exports registered a slight year-on-year increase of 1%; however, for this year, an increase of between 1.5% and 4% is expected.
Directors of the Bank of Guatemala (Banguat) reported that the prospects for this year are more favorable, since it is expected a better performance in exports of several products, including bananas.
With the beginning of the new government in Guatemala, businessmen in the agricultural sector are optimistic and believe that the priorities of the new authorities should be to guarantee property rights and improve road infrastructure.
According to a survey conducted to measure the perceptions of the members of the Chamber of Agriculture (Camagro), economic revitalization is another issue that should prioritize the work agenda of the government of Alejandro Giammattei.
FAO estimates that by the end of 2019 the production of grain in the region will be 29.8 million tons, below the average volume reported in the last five years.
The decline in the volume harvested will be because of the rainfall deficits that this year affected grain crops in most countries, reported the Food and Agriculture Organization of the United Nations (FAO).
In Guatemala, 54% of businessmen believe that in 2020 the local economy will accelerate, 42% believe that stable growth will be reported and 4% believe that a slowdown could be reported.
According to the Third Business Perception Survey conducted by the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (Cacif), 67% of respondents expect greater growth of their companies and 56% expect more employment with the arrival of the new government.
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.
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 its latest update of economic growth projections for 2019, ECLAC estimates that the Dominican Republic will close the year with a 5% increase, followed by Panama, which would reach a growth rate of 3.7%.
According to economic growth projections for Latin America, which were estimated by the Economic Commission for Latin America (ECLAC) and updated in November, the Dominican Republic will be the country in the region that will increase its production the most this year.
Except for Nicaragua, which projects a decline in revenues, Fitch Ratings estimates that by year-end the region's insurance markets will have grown from 3% to 8%.
According to the report Perspectives of Insurance Industry in Central America, prepared by the rating agency Fitch Ratings, El Salvador will be the market that in 2019 will register more dynamism in the region, reporting an 8% increase over revenues reported in 2018.
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 registering year-on-year rises of 7% and 6% in July and August, respectively, in September the Confidence in Economic Activity Index in Guatemala showed a 7% variation.
An inflationary rhythm of 4.08% is forecast for September, of 4.22% for October and of 4.29% for November 2019. Regarding December 2019 and 2020, the Panel foresees an inflationary rhythm of 4.43% and 4.46%, in that order, the report of the Banco de Guatemala needs.
If the international prices of bananas, coffee, sugar and palm oil do not improve, and if combined with a global economic recession, Guatemala, Honduras and El Salvador could stop exporting as much as $2.268 million altogether in 2021.
According to the report "Proceso de integración Centroamericana del Triángulo Norte: Escenarios de riesgo en la matriz de exportación" (Central American Integration Process of the Northern Triangle: Risk Scenarios in the Export Matrix), prepared by the Asociación de Investigación de Estudios Sociales (Asíes), garment making is another activity that could be affected in the coming years.
Although Guatemala's foreign sales continue to decline, an improvement is expected towards the end of the year, which would be explained by a rebound in the prices of some agricultural products.
Figures from the Bank of Guatemala (Banguat) specify that in the first six months of the year sales abroad totaled $5,666 million, a figure that is just 0.3% lower than the $5,681 million reported in the same period of 2018.
Faced with the threat of a global economic slowdown and the possibility of the U.S. entering recession next year, businessmen in the region argue that to mitigate possible adverse effects, it is key to diversify export destinations.
Market analysts assure that the slowdown in U.S. economic activity is already a reality, and that what is still not clear, is the possibility that the economy will go into recession next year.
After in March 2019 the Confidence in Economic Activity Index in Guatemala dropped 6% in year-on-year terms, in May the increase was 14% regarding the same month in 2018.
The report of the Banco de Guatemala reviews that "... the inflationary rhythm is forecast at 4.50% for May as well as June and 4.48% for July 2019. Regarding December 2019 and 2020, the Panel foresees an inflationary rhythm of 4.49% and 4.55%, in that order.
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.
Guatemalan producers estimate that for the 2018-2019 harvest production will reach 752,575 metric tons of sugar, a volume that would be slightly higher than that recorded in the 2017-2018 cycle.
The Asociación de Azucareros de Guatemala (Asazgua) projects a slightly higher growth than the previous year because of climate factors, which will be confirmed when they have the final figures for closing production.
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