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.
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.
Agriculture, Financial and Insurance Activities, and Real Estate Activities, are the sectors that in Guatemala and in the context of the economic reopening, have increased their growth forecasts for 2020.
In June, when mobility restrictions were severe in the country due to the outbreak of covid-19, the Bank of Guatemala (Banguat) predicted that by the end of the year, Agriculture would grow by 1.1%, Financial and insurance activities by 2% and Real estate activities by 2.8%.
Variations indicating a certain improvement in the world economy, the reopening of different markets and the recovery of exports are some of the factors that could influence Guatemala's economic activity to decrease less than expected in 2020.
After the industrial activity registered in May one of the lowest levels of the last years, it is expected that the sector will close 2020 in negative variations, but more moderate than those reported in the first half of the year.
The Index of Economic Activity of the Chamber of Industry of Guatemala, which is calculated by Central American Business Intelligence (Cabi), states that during May and in the context of the economic crisis resulting from the outbreak of covid-19, fell by about 10% when compared to the same period in 2019.
After the Economic Activity Confidence Index reported a 19% drop in March 2020, in April the situation worsened with a -43% year-on-year variation, a drop that agrees with the advance of the health crisis in the country.
In April 2020, the level of the Economic Activity Confidence Index stood at 32.64 points, 43.25% lower than that recorded in March 2020 (57.52 points) and fell by 26.83% compared to April 2019 (44.61 points), reported the Bank of Guatemala.
In February 2020, the Index of Confidence in Economic Activity in Guatemala reported a 64% growth compared to the same month last year, reinforcing the upward trend that has been registered since July 2019.
Businessmen forecast an inflationary rhythm of 3.25% for February, 3.36% for March and 3.38% for April 2020. As to December 2020 and 2021, the Panel forecasts an inflationary rhythm of 4.16% and 4.20%, in that order.
In January, the Economic Activity Confidence Index registered a 39% increase compared to the same month in 2019, reinforcing the upward trend that has been reported since July 2019.
An inflationary rhythm of 3.72% is forecast for January, 3.71% for February and 3.84% for March 2020. As to December 2020 and 2021, the Panel forecasts an inflationary rhythm of 4.07% and 4.19%, in that order.
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.
In November of this year, the Index of Confidence in Economic Activity in Guatemala reported a 28% growth with respect to the same month in 2018, reinforcing the upward trend that has been registered since July 2019.
Businessmen forecast an inflationary rhythm of 3.34% and 3.54% for November and December 2019, respectively, as well as 3.69% for January 2020.
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).
After registering a 20% year-on-year drop in June, in July the Confidence in Economic Activity Index in Guatemala showed a 7% variation.
The report of the Bank of Guatemala states that "... The Panel forecasts an inflationary rhythm of 4.72% for July, of 4.70% for August and of 4.72% for September 2019. Regarding December 2019 and 2020, the Panel foresees an inflationary rhythm of 4.66% and 4.55%, in that order.
After in May 2019 the Confidence in Economic Activity Index in Guatemala increased 14% in year-on-year terms, in June the fall regarding the previous month was of 15%.
The Banco de Guatemala report states that "... The Panel forecasts an inflationary rhythm of 4.45% for June as well as for July and of 4.49% for August 2019. For December 2019 and 2020, the Panel foresees an inflationary rhythm of 4.53% and 4.52%, in that order.
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.
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.
After in February 2019 the Confidence in Economic Activity Index in Guatemala reported a year-on-year decrease of 8%, in March the variation was of -6% regarding the same month of 2018.
The report of the Banco de Guatemala reports that during March "... an inflationary rhythm of 4.34% is forecast for March and 4.37% for April and May 2019. For December 2019 and 2020, the Panel expects an inflationary rhythm of 4.35% and 4.41%, in that order.