Economic trends
Guatemala was highly touched by the global economic crisis which affected the country's exports and the money transfers from expatriates, the Guatemalan economy was very close to enter into recession in 2009, the growth was 0.5%. The revival of foreign trade and the measures adopted by the government have allowed a growth increase of 2.4% in 2010. The perspectives are gloomy due to the slowdown of the American growth.
After an economic crisis transformed into a humanitarian crisis due to meteorological problems, Guatemala requested help from the IMF and signed a stand-by treaty in April 2009. The priority of the government is, on one side, to continue financing the reconstruction and recovery projects, and on the other side, to establish essential structural reforms. In particular, a reform of the fiscal system which should allow to improve the collection of taxes and affront its actual deficit. The country is struck by several difficulties, notably crime and corruption which represent hindrances to tourism and business.
In the social plan, Guatemala faces a difficult situation: more than half of the population lives below the poverty line, the country has one of the highest rates of malnutrition in the world, and there is a strong inequality in income.
Main branches of industry
The agricultural sector accounts for 10% of the GDP and employs more than one third of the active population. The country produces and exports mainly coffee, sugar, bananas, cotton, rubber, cardamon and a variety of precious woods and exotic fruits. The country has a small mining industry and extracts copper, zinc, iron and nickel.
The industry sector accounts for approximately 30% of the GDP and employs 23% of the population. It stands mainly from textiles, paper industries, pharmaceutical products, as well as rubber transformation industries. It has to be noted that since Guatemala's entry into the Free Trade Area of the Americas (FTAA) created by the United States, the advantages in customs have brought an increment in investments and the establishment of American companies in the country.
The service sector represents the largest part of the GDP accounting for more than 60%. The tourism industry is very dynamic and continues to grow.
International trade
Foreign trade represents more than 50% of the Guatemalan GDP. Guatemala is one of the five countries of the Central American Common Market (CACM) along with Costa Rica, El Salvador, Honduras and Nicaragua. The FTAA (or ALCA) agreement was signed by Guatemala in 2004. This agreement is characterized by an advantageous customs union for the Central American countries, Mexico, the United States and Canada.
The main export products are coffee, sugar, oil, textile manufacturing, fruits, vegetables and cardamon. Guatemala's main export clients are: the United States, El Salvador, Honduras, Mexico and Costa Rica. The main import partners are: the United States, Mexico, China, El Salvador, Costa Rica and South Korea. The country's trade balance is structurally in deficit, a trend that should continue.
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Last updates: February 2012
