Although Guatemala and the U.S. have already signed an agreement on migration issues, the exchange rate reported a slight increase and the upward trend is expected to continue over the next few days.
President Trump's warning to Guatemala to impose export tariffs and taxes on remittances and transfers had a direct impact on the exchange market.
Data from the Banco de Guatemala indicate that between July 23 and 29 the price of the Quetzal with respect to the US dollar increased from Q7.64 to Q7.68, which according to the authorities is explained by the uncertainty generated by the possible sanctions against the country.
Most of the reported increase in foreign investment flows to the country in the first quarter of the year was explained by investments in the electricity sector.
In the first quarter of 2019, figures from the Bank of Guatemala (Banguat) report a considerable increase in foreign direct investment (FDI) compared to the same period last year, going from $293 million to $340 million.
At the end of June in Guatemala, credit to the private sector registered a 7% year-on-year growth, which is explained by the upturn in mortgage and consumer loans.
Figures published by representatives of the Banco de Guatemala specify that at the end of the first semester of the year, the total credit to the private sector reached $26.571 million, amount that is 6.9% higher than that reported a year ago.
The rise in microcredits, consumer loans and the construction sector contributed to the 7% year-on-year increase reported in April 2019.
Data from the Bank of Guatemala show that between April 2018 and the same month of 2019, credit to the private sector in the country increased from $24.687 million to $26.534 million, which is equivalent to a 7.4% increase.
During the first three months of the year, the country exported $109 million worth of fruit, 12% less than in the same period in 2018, in part because of the closure of one of the most important companies.
Figures from the Banco de Guatemala detail that between the first quarter of 2018 and the same period of 2019, foreign sales of fresh, dried and frozen fruits decreased from $123 million to $109 million.
For the Guatemalan private sector, the uncertainty that prevails in the country is because the details of the government programs of the political parties that will participate in the General Elections are not known until now.
Last March 18 officially began the political campaign for the General Elections in the country, but the legal inconveniences faced by some candidates for the presidency cause doubts in the future, since there is no clarity of who will participate in the process and the government plans of the candidates are not known in depth.
Data from the Bank of Guatemala indicate that in 2018 the amount of foreign direct investment (FDI) that attracted the country reached $1.032 million, $738 million lower than the $1.170 billion registered in 2017.
Data from the Bank of Guatemala indicate that in 2018 the amount of foreign direct investment (FDI) that attracted the country reached $1.032 million, $738 million lower than the $1.170 billion registered in 2017.
Although poor social indicators and a low tax burden are a threat to the country's progress, for Fitch the Guatemalan economy has the capacity to overcome external adversities.
After the last visit of Fitch Ratings to Guatemala, representatives of the rating agency expressed the opinion that health, education and security indicators, together with the tax situation, are issues that should concern the country.
On March 18, the political campaign for the General Elections in Guatemala officially began, but the legal inconveniences faced by some candidates cause doubts for the future.
Zury Ríos, Thelma Aldana and Sandra Torres are the three presidential candidates leading the voting intentions for the 2019 General Elections, but both Ríos and Aldana have had legal problems in their registration process, and Torres, already a registered candidate, was accused of illegal electoral financing. These cases have caught the public's attention and prevented them from knowing the concrete economic proposals.
The pessimism expressed by consumers in Costa Rica and the constant deterioration of business expectations in Guatemala reflect part of the complex challenges faced by Central American economies this year.
A report prepared by the School of Statistics of the University of Costa Rica (UCR) shows the negative trend that come showing the economic expectations, because between February 2018 and the same month of 2019, the Consumer Confidence Index (ICC) fell 15%.
The behavior of credit to the private sector, public spending, imports and remittances would explain the higher growth expected for the economy this year.
The Bank of Guatemala (Banguat) reported that this year's economic growth is projected to range between 3% and 3.8%, with a central value of 3.4%, up from the 3.1% reported during 2018.
During 2018, the country registered exports of electric energy for $181 million, 76% more than reported in 2017, and its main buyers were El Salvador, Honduras and Mexico.
The most recent data from the Bank of Guatemala show that last year Guatemala sold $119 million in electricity to El Salvador, $37 million to Honduras, $1.2 million to Nicaragua and $930,000 to Costa Rica.
In 2018, sales abroad totaled $11 billion, recording a minimum 0.3% increase compared to 2017, a performance attributed to international market factors.
After registering a 5% increase between 2016 and 2017, in 2018 exports did not report significant year-on-year increases, because international prices of some agricultural products are not going through their best.
Limiting the fees charged in Costa Rica and establishing a law that defines market limits in Guatemala are part of the attempts being made in the region to regulate the use of credit cards.
A law proposal presented last January before the Legislative Assembly of Costa Rica, aims to regulate the percentage of the commission paid by businesses for credit or debit cards. According to the initiative, this task would be in charge of the Central Bank and the Commission to Promote Competition.
After the law seeking to regulate the credit card market in Guatemala was declared unconstitutional, a new proposal was presented.
The Credit Card Law that was declared unconstitutional at the beginning of 2019, entered into force on March 8, 2016, however, after the business chambers, card issuers and the Bank of Guatemala filed legal appeals before the Constitutional Court (CC), was suspended on March 31 of that year.
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