| Date - Field | Guatemala - Economy - overview |
2009 January
Economy - overview | Guatemala is the most populous of the Central American countries with a GDP per capita roughly one-half that of Argentina, Brazil, and Chile. The agricultural sector accounts for about one-tenth of GDP, two-fifths of exports, and half of the labor force. Coffee, sugar, and bananas are the main products, with sugar exports benefiting from increased global demand for ethanol. The 1996 signing of peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, and Guatemala since then has pursued important reforms and macroeconomic stabilization. The Central American Free Trade Agreement (CAFTA) entered into force in July 2006 and has since spurred increased investment in the export sector, but concerns over security, the lack of skilled workers and poor infrastructure continued to hamper foreign participation. The distribution of income remains highly unequal with more than half of the population below the national poverty line. Other ongoing challenges include increasing government revenues, negotiating further assistance from international donors, curtailing drug trafficking and rampant crime, and narrowing the trade deficit. 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-thirds of exports. Economic growth will slow in 2009 as export demand from US and other Central American markets drop and foreign investment slows amid the global slowdown. |
2008 January
Economy - overview | Guatemala is the largest and most populous of the Central American countries with a GDP per capita roughly one-half that of Argentina, Brazil, and Chile. The agricultural sector accounts for about one-fourth of GDP, two-fifths of exports, and half of the labor force. Coffee, sugar, and bananas are the main products, with sugar exports benefiting from increased global demand for ethanol. The 1996 signing of peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, and Guatemala since then has pursued important reforms and macroeconomic stabilization. On 1 July 2006, the Central American Free Trade Agreement (CAFTA) entered into force between the US and Guatemala and has since spurred increased investment in the export sector. The distribution of income remains highly unequal with about 56% of the population below the poverty line. Other ongoing challenges include increasing government revenues, negotiating further assistance from international donors, upgrading both government and private financial operations, curtailing drug trafficking and rampant crime, and narrowing the trade deficit. 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-thirds of exports. |
2007 January
Economy - overview | Guatemala is the largest and most populous of the Central American countries with a GDP per capita roughly one-half that of Brazil, Argentina, and Chile. The agricultural sector accounts for about one-fourth of GDP, two-fifths of exports, and half of the labor force. Coffee, sugar, and bananas are the main products. The 1996 signing of peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, and Guatemala since then has pursued important reforms and macroeconomic stabilization. The distribution of income remains highly unequal with about 75% of the population below the poverty line. Other ongoing challenges include increasing government revenues, negotiating further assistance from international donors, upgrading both government and private financial operations, curtailing drug trafficking, and narrowing the trade deficit. Remittances from a large expatriate community that moved to the United States during the war have become an important source of foreign exchange. |
2006 January
Economy - overview | Guatemala is the largest and most populous of the Central American countries with a GDP per capita roughly one-half that of Brazil, Argentina, and Chile. The agricultural sector accounts for about one-fourth of GDP, two-thirds of exports, and half of the labor force. Coffee, sugar, and bananas are the main products. The 1996 signing of peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, but widespread political violence and corruption scandals continue to dampen investor confidence. The distribution of income remains highly unequal, with perhaps 75% of the population below the poverty line. Other ongoing challenges include increasing government revenues, negotiating further assistance from international donors, upgrading both government and private financial operations, curtailing drug trafficking, and narrowing the trade deficit. |
2005 January
Economy - overview | Guatemala is the largest and most populous of the Central American countries with a GDP per capita roughly one-half that of Brazil, Argentina, and Chile. The agricultural sector accounts for about one-fourth of GDP, two-thirds of exports, and half of the labor force. Coffee, sugar, and bananas are the main products. The 1996 signing of peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, but widespread political violence and corruption scandals continue to dampen investor confidence. The distribution of income remains highly unequal, with perhaps 75% of the population below the poverty line. Other ongoing challenges include increasing government revenues, negotiating further assistance from international donors, upgrading both government and private financial operations, curtailing drug trafficking, and narrowing the trade deficit. |
2004 January
Economy - overview | Guatemala is the largest and most populous of the Central American countries with a GDP per capita roughly one-half that of Brazil, Argentina, and Chile. The agricultural sector accounts for about one-fourth of GDP, two-thirds of exports, and half of the labor force. Coffee, sugar, and bananas are the main products. The 1996 signing of peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, but widespread political violence and corruption scandals continue to dampen investor confidence. The distribution of income remains highly unequal, with perhaps 75% of the population below the poverty line. Ongoing challenges include increasing government revenues, negotiating further assistance from international donors, upgrading both government and private financial operations, curtailing drug trafficking, and narrowing the trade deficit. |
2003 January
Economy - overview | The agricultural sector accounts for about one-fourth of GDP, two-thirds of exports, and half of the labor force. Coffee, sugar, and bananas are the main products. Former President ARZU (1996-2000) worked to implement a program of economic liberalization and political modernization. President PORTILLO has continued the liberalization program but with more sporadic results. The 1996 signing of the peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, but numerous corruption scandals associated with the PORTILLO administration have dampened investor confidence. The distribution of income remains highly unequal, with perhaps 75% of the population below the poverty line. Ongoing challenges include increasing the government revenues, negotiating further assistance from international donors, upgrading both government and private financial operations, and narrowing the trade deficit. A free trade agreement between the US and Central American countries promises greater access to US and neighboring markets. |
2002 January
Economy - overview | The agricultural sector accounts for about one-fourth of GDP, two-thirds of exports, and half of the labor force. Coffee, sugar, and bananas are the main products. Former President ARZU (1996-2000) worked to implement a program of economic liberalization and political modernization. The 1996 signing of the peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment. In 1998, Hurricane Mitch caused relatively little damage to Guatemala compared to its neighbors. Ongoing challenges include increasing government revenues, negotiating further assistance from international donors, and increasing the efficiency and openness of both government and private financial operations. Despite low international prices for Guatemala's main commodities, the economy grew by 3% in 2000 and 2.3% in 2001. Guatemala, along with Honduras and El Salvador, recently concluded a free trade agreement with Mexico and has moved to protect international property rights. However, the PORTILLO administration has undertaken a review of privatizations under the previous administration, thereby creating some uncertainty among investors. |
2001 January
Economy - overview | The agricultural sector accounts for about one-fourth of GDP, two-thirds of exports, and half of the labor force. Coffee, sugar, and bananas are the main products. Former President ARZU (1996-2000) worked to implement a program of economic liberalization and political modernization. The 1996 signing of the peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment. In 1998, Hurricane Mitch caused relatively little damage to Guatemala compared to its neighbors. Ongoing challenges include increasing government revenues, negotiating further assistance from international donors, and increasing the efficiency and openness of both government and private financial operations. Despite low international prices for Guatemala's main commodities, the economy grew by 3% in 2000 and is forecast to grow by 4% in 2001. Guatemala, along with Honduras and El Salvador, recently concluded a free trade agreement with Mexico and has moved to protect international property rights. However, the PORTILLO administration has undertaken a review of privatizations under the previous administration, thereby creating some uncertainty among investors. |
2000 January
Economy - overview | The agricultural sector accounts for one-fourth of GDP, two-thirds of exports, and half of the labor force. Coffee, sugar, and bananas are the main products. Manufacturing and construction account for one-fifth of GDP. Since assuming office in January 1996, former President ARZU worked to implement a program of economic liberalization and political modernization. The signing of the peace accords in December 1996, which ended 36 years of civil war, removed a major obstacle to foreign investment. In 1998, Hurricane Mitch caused relatively little damage to Guatemala compared to its neighbors. Remaining challenges include beefing up government revenues, negotiating further assistance from international donors, and increasing the efficiency and openness of both government and private financial operations. Growth should remain at the same level in 2000 provided world agricultural prices do not plunge. |
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This page was last updated on 7 July, 2009 |
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