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Economy of Guatemala
 
 
 

General

A developing economy, Guatemala faces many social problems and is one of the poorest countries in Latin America. The distribution of income remains highly unequal with more than half of the population below the national poverty line and just over 400,000 (3.2%) unemployed.

Remittances from Guatemalans who fled to the United States during the civil war now constitute the largest single source of foreign income (two thirds of exports and one tenth of GDP).

In recent years the exporter sector of non-traditional products has grown dynamically representing more than 53% of global exports. Some of the main products for export are fruits, vegetables, flowers, handicrafts, cloths and others. In the face of a rising demand for bio-fuels, the country is growing and exporting an increasing amount of raw materials for bio-fuel production, especially sugar cane and palm oil. Critics say that this development leads to higher prices of staple foods like corn, a major ingredient in the Guatemalan diet. As a consequence of the subsidisation of US American corn, Guatemala imports nearly half of its corn from the US that is using 40% of its crop harvest for bio-fuel production.

Gross Domestic Product (GDP) in purchasing power parity (PPP) in 2010 was estimated at $70.15 billion. The service sector is the largest component of GDP at 63%, followed by the industry sector at 23.8% and the agriculture sector at 13.2% (2010 est.). Mines produce gold, silver, zinc, cobalt and nickel. The agricultural sector accounts for about two-fifths of exports, and half of the labour force. Organic coffee, sugar, textiles, fresh vegetables and bananas are the country's main exports. Inflation was 3.9% in 2010.

The 1996 peace accords that ended the decades-long civil war removed a major obstacle to foreign investment. Tourism has become an increasing source of revenue for Guatemala.

In March 2006, Guatemala's congress ratified the Dominican Republic – Central American Free Trade Agreement (DR-CAFTA) between several Central American nations and the US. Guatemala also has free trade agreements with Taiwan and Colombia.

Overview

Economy - overview : Guatemala is the most populous country in Central America with a GDP per capita roughly one-half that of the average for Latin America and the Caribbean. The agricultural sector accounts for 13% of GDP and 38% of the labour force; key agricultural exports include coffee, sugar, bananas, and vegetables. The 1996 peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, and since then Guatemala has pursued important reforms and macroeconomic stabilisation. The Dominican Republic-Central American Free Trade Agreement (CAFTA-DR) entered into force in July 2006 spurring increased investment and diversification of exports, with the largest increases in ethanol and non-traditional agricultural exports. While CAFTA-DR has helped improve the investment climate, concerns over security, the lack of skilled workers and poor infrastructure continue to hamper foreign direct investment. The distribution of income remains highly unequal with the richest 20% of the population accounting for more than 51% of Guatemala's overall consumption. More than half of the population is below the national poverty line and 13% of the population lives in extreme poverty. Poverty among indigenous groups, which make up 38% of the population, averages 73% and extreme poverty rises to 28%. Nearly one-half of Guatemala's children under age five are chronically malnourished, one of the highest malnutrition rates in the world. Given Guatemala''s large expatriate community in the United States, it is the top remittance recipient in Central America, with inflows serving as a primary source of foreign income equivalent to nearly two-fifths of exports or one-tenth of GDP. Economic growth fell in 2009 as export demand from US and other Central American markets dropped and foreign investment slowed amid the global recession. The economy gradually recovered in 2010-12.
GDP (purchasing power parity) : $79.97 billion (2012 est.)
GDP (official exchange rate) : $49.88 billion (2012 est.)
GDP - real growth rate : 3% (2012 est.)
GDP - per capita (PPP) : $5,300 (2012 est.)
GDP - composition by sector : household consumption: 85.7%
government consumption: 10.7%
investment in fixed capital: 14.6%
investment in inventories: -0.2%
exports of goods and services: 24.9%
imports of goods and services: -35.7% (2012 est.)
Labour force : 4.359 million (2012 est.)
Labour force - by occupation : agriculture: 38%
industry: 14%
services: 48% (2011 est.)
Unemployment rate : 4.1% (2011 est.)
Population below poverty line : 54% (2011 est.)
Household income or consumption by percentage share
: lowest 10%: 1.3%
highest 10%: 42.4% (2006)
Distribution of family income - Gini index
: 55.1 (2007)
Budget : revenues: $5.856 billion
expenditures: $7.062 billion (2012 est.)
Taxes and other revenues : 11.7% of GDP (2012 est.)
Budget surplus (+) or deficit (-) : -2.4% of GDP (2012 est.)
Public debt : 29.4% of GDP (2012 est.)
Inflation rate (consumer prices)
: 3.8% (2012 est.)
Central bank discount rate
: 6.5% (31 December 2010 est.)
Commercial bank prime lending rate
: 13.49% (31 December 2012 est.)
Stock of narrow money : $7.975 billion (31 December 2012 est.)
Stock of broad money : $21.76 billion (31 December 2012 est.)
Stock of domestic credit : $20.5 billion (31 December 2012 est.)
Market value of publicly traded shares : $NA
Agriculture - products : sugar cane, corn, bananas, coffee, beans, cardamom; cattle, sheep, pigs, chickens
Industries : sugar, textiles and clothing, furniture, chemicals, petroleum, metals, rubber, tourism
Industrial production growth rate : 2.6% (2012 est.)
Electricity - production : 8.146 billion kWh (2011 est.)
Electricity - consumption : 8.161 billion kWh (2011 est.)
Electricity - exports : 193.3 million kWh (2011 est.)
Electricity - imports : 525.6 million kWh (2011 est.)
Crude Oil - production : 10,000 bbl/day (2011 est.)
Crude Oil - exports : 12,620 bbl/day (2009 est.)
Crude Oil - imports : 0 bbl/day (2009 est.)
Crude Oil - proved reserves : 83.07 million bbl (1 January 2012 est.)
Refined petroleum products - production : 1,132 bbl/day (2008 est.)
Refined petroleum products - consumption : 80,810 bbl/day (2011 est.)
Refined petroleum products - exports : 4,162 bbl/day (2008 est.)
Refined petroleum products - imports : 68,910 bbl/day (2008 est.)
Natural gas - production : 0 cu m (2010 est.)
Natural gas - consumption : 0 cu m (2010 est.)
Natural gas - exports : 0 cu m (2010 est.)
Natural gas - imports : 0 cu m (2010 est.)
Natural gas - proved reserves : 2.96 billion cu m (1 January 2006 est.)
Current account balance : -$2.039 billion (2012 est.)
Exports : $10.09 billion (2012 est.)
Exports - commodities : coffee, sugar, petroleum, apparel, bananas, fruits and vegetables, cardamom
Exports - partners : US 39.2%, El Salvador 11.4%, Honduras 6.8%, Mexico 5.4%, Nicaragua 4% (2012)
Imports : $15.84 billion (2012 est.)
Imports - commodities : fuels, machinery and transport equipment, construction materials, grain, fertilisers, electricity, mineral products, chemical products, plastic materials and products
Imports - partners : US 38.4%, Mexico 11.9%, China 8.3%, El Salvador 5.1%, Colombia 4.2% (2012)
Reserves of foreign exchange and gold : $6.694 billion (31 December 2012 est.)
Debt - external : $16.79 billion (31 December 2012 est.)
Exchange rates : quetzales (GTQ) per US dollar - 7.8336 (2012 est.); 7.7854 (2011 est.); 8.0578 (2010 est.); 8.1616 (2009); 7.5895 (2008)
Fiscal years : calendar year
 

 
 

 



 


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