Guatemala’s economy grew only 2% in the fourth quarter of 2023 

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By Marco Echevarria

The Guatemalan economy measured by gross domestic product (GDP) grew 2% in the fourth quarter of the previous year, which had an annual result of 3.5%, despite the fact that the figures for each quarter were adjusted upwards by the central bank.

However, by 2024 the growth projection is maintained in the range of 2.5 to 4.5% with a central value of 3.5% and by 2025, the estimate is 2.6 to 4.6% with a core position of 3.6%, central bank authorities reported.

The closing figures

According to official information, the real GDP in 2023 was Q589 thousand 870.3 million, and in nominal terms – without the price effect – it was Q818 billion 54 million.

In October, a series of protests were held that included roadblocks for several weeks, which impacted the national productive system, so considering that GDP as of September was 3.8% (adjusted to 4% later), production would have grown in that last percentage from October to December, reaching Q592.870 million, which did not happen.

Of this account, most productive activities showed deceleration and closed in the last quarter by less than 2 per cent compared to the same period in 2022, with the exception of trade and vehicle repair (2.7 per cent); financial and insurance activities (9.6 per cent); real estate activities (4.3 per cent); information and communications (4.8 per cent); administrative and support services activities (3.7%); and public administration and defence (2.5%), activities that together accounted for about 82 per cent of the rate of GDP variation in the quarter under consideration, the report indicates.

Meanwhile, the sectors with the highest negative performance were mine and quarrying (from 0.5% to -24.9%; construction (from 14.4% to -6.1%); and accommodation and meal service activities (from 12.4% to 1.2%) and electricity, water and sanitation (from 10.3% to 0.9%).

Destination of expenditure

With regard to the measurement of GDP on the expenditure side, private consumption grew by 4.7% (3 % in the same quarter of the previous year), driven by the higher demand for household goods and services, mainly related to the increase in employment and income, as well as the increase in family remittances and the dynamism of consumer credit; factors that contributed to the growth of domestic production and the import of goods and services.

In addition, the number of contributors and the total salaries recorded by the Guatemalan Institute of Social Security (IGSS) showed an increase of 5.5% and 11.5%, respectively (5.5% and 8.8% in its order, in the fourth quarter of 2022).

Revision cycle

Johny Gramajo Marroquín, economic manager of the Bank of Guatemala (Banguat), explained to Prensa Libre that a review and adjustment of the economy was made from 2020 to 2023, as part of the national account system.

In any case, he described the results as positive for Guatemala because despite the fall in production observed in previous years as a result of the pandemic, the recovery has been very rapid and the highest in the region.

We come from an 8% growth of 2021, 4.2% in 2022 and 3.5% by 2023, so when doing a review we are better and if that is associated with the fact that the country’s risk rating agencies’ notes were maintained, all this is positive,” added Álvaro González Ricci, president of the Monetary Board (JM) and Banguat.

On the other hand, the data from the monthly index of economic activity (Imae) to February 2024 was 3.8% and the forecast is that it will converge to 3.5% by the end of the year.

The manager also stressed that, during the year, there has been an increase in the confidence index of economic activity (Icae) as 2023 was closed with 48 points, below 50 points that is the border of expansion or the contraction of productive activity, and in March it was 70 points, which means that there may be an economic expansion in the next six months, which would be in line with the projected growth.

“We come from an 8% growth of 2021, 4.2% in 2022 and 3.5% by 2023, so when doing a review we are better off and if that is associated with the keeping of the country risk rating agency notes”

Álvaro González Ricci, President Banguat

The picture that paints for the country is positive, González Ricci added, and one of the challenges is the materialization of the budget, in the sense of the execution of physical work in ports, airports, roads, strengthening of institutions and the fight against corruption.

In his view, an annual growth rate of 5 per cent required raising total investment from GDP from 15 per cent to 24 per cent between public and private.   


In this sense, the WB also reviewed the flows of foreign direct investment (FDI), which by 2021 was US$1 261.8 million; in 2022 there was an upward adjustment and instead of US$1 billion 378.1 million – without the investment effect of a telecommunications company – the data was US$1 442 million. Adding the operation, the FDI data would remain at US$3.461 million.

By 2023, the amount of FDI was US$1.5522.3 million, and for the current financial year the amount is estimated at between US$1.620 million and US$1 650 million.

The manager then highlighted that the indicator maintains an upward trend that began in 2021, after a downward trend that had been registering until 2020.

Projections 2024

With the closing information of the economy of 2023, the evaluation report will be presented in May, which will mark the forecast for the remainder of the year.

For the time being, it was reported that economic performance is maintained as planned and there is no impact on the outlook for the end of the financial year. Is there an expected trajectory of economic growth that will converge to 3.5%. When you see the four quarters at the end of the year,” Gramajo Marroquín said.    

This article has been translated from the original which first appeared in Prensa Libre