Guatemala Forecasts Economic Growth of 3.5 % in 2023

The actions are part of the management of the Monetary Policy by the Bank of Guatemala.

by Pamela Contreras
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Guatemala City, by Brenda Larios -AGN.- The Medium Term Fiscal Policy Report 2023-2027, released by the Ministry of Public Finance, indicates that the International Monetary Fund and the World Bank foresee that Guatemala’s economic growth will return to its potential increase in 2023, between 3.6% and 3.5%.

According to the chairman of the Bank of Guatemala -Banguat-, Álvaro González Ricci, “The economic growth for this year in Latin America is 1.7%, and Guatemala is planning to grow 3.5%. It means that we are growing twice as much as Latin America. Guatemala’s advantage is that its macroeconomy is still an example worldwide.”

These actions are part of Banguat’s management of the Monetary Policy.

The Analysis

Based on the medium-term projections of the international context, Banguat estimates that gross domestic product growth will be around 2.5% to 4.5% by 2023, with an average value of 3.5%.

The average value of the 2024 forecast is expected to reach 2.6% and 2.7% by 2027. The official press release details, “The previous, due to the progress in the normalization of domestic demand, mainly in actual private consumption, has been estimated to have a long-term elasticity concerning income of 98.6%, so it is expected to have a growth of 2.7% by 2023.”

Moreover, it is expected to increase gradually to 3.1% by 2027. Receiving household remittances also boosts it, and financing costs do not increase substantially in the domestic market.

Furthermore, as the recovery of the domestic economy progresses, inflation is expected to be at the low end of Banguat’s target range of 3.0% from 2023 to 2026.

Imports

The central bank projects that imports will grow between 6.5% and 9.5% in 2023, with an average value of 8.0% for the economy’s external sector.

These are still influenced by fuel prices, less repressed consumption, and private investment; growth is expected to remain stable at around 6.0 % in the following years.

Exports are projected to grow between 4.5% and 7.5% by 2023, and in the medium term, it is expected to be in the low scenario, around 4.0% until 2027.

These projections are subject to the recovery of the main trading partners and the performance of agricultural products. 

These actions strengthen the country’s macroeconomy and influence the attraction of domestic and foreign investment.

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