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Guatemala: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
The violence caused by organized crime, drug traffickers and impunity, but also by inequality and poverty (which affects more than half of the population), is the main problem facing the country. Guatemala often suffers from natural disasters (volcanoes, hurricanes, earthquakes), nevertheless has a significant potential for tourism, agriculture, hydrology and mineral extraction.
Since 2011, the Guatemalan economy, which had been with Panama the only country to have avoided a recession in 2009, has shown economic indicators reflecting good macroeconomic and financial stability. The resumption of international trade and the measures adopted by the government allowed the economy to grow 2.4% in 2010 and 2.8% in 2011. However, the outlook remains uncertain due to the slowdown in U.S. growth.
Raising the level of budgetary resources is essential to enable the country's development through investment in physical infrastructure as well as in the social sectors. However, the tax burden is only 10% of GDP. Reforming the tax system should enable the state to improve tax collection and deal with its current deficit. The country faces many challenges, including crime and corruption, which represent barriers to tourism and business.
On the social level, Guatemala faces a difficult situation: more than half of the population lives below the poverty line (53% in 2011), the country has one of the highest rates of malnutrition in the world, and there is a strong inequality in income.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 37.68e | 41.18e | 46.73 | 49.61 | 53.10 |
| GDP (Constant Prices, Annual % Change) | 0.5 | 2.8 | 2.8 | 3.0 | 3.5 |
| GDP per Capita (USD) | 2,689e | 2,867e | 3,177e | 3,294 | 3,442 |
| General Government Gross Debt (in % of GDP) | 22.9 | 24.2 | 24.2 | 25.0 | 25.7 |
| Inflation Rate (%) | 1.9e | 3.9e | 6.3 | 5.4 | 5.2 |
| Current Account (billions USD) | 0.01 | -0.83 | -1.55e | -1.87 | -2.12 |
| Current Account (in % of GDP) | 0.0 | -2.0 | -3.3e | -4.0 | - |
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
The agricultural sector accounts for 11.3% of the GDP, it employs more than one third of the active population and accounts for over 70% of the country's exports.
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 29.2% 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 59.5%. The tourism industry is very dynamic and continues to grow.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 33.2 | 22.8 | 43.7 |
| Value Added (in % of GDP) | 11.9 | 27.4 | 60.7 |
| Value Added (Annual % Change) | 3.0 | 3.0 | 1.6 |
Source: World Bank - Last Available Data.
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| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Guatemala Quetzal (GTQ) - Average Annual Exchange Rate For 1 USD | 7.60 | 7.67 | 7.56 | 8.16 | 8.06 |
Source: World Bank - Last Available Data.
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Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
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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 United States is the country's indispensable trading partner. As its largest client and supplier, it is also the second largest bilateral provider (behind Spain) of development assistance and receives about 1.4 million Guatemalan emigrants whose remittances account for 11% of GDP.
The main exports are coffee, sugar, oil, textiles, fruits and vegetables and cardamom. The main clients of Guatemala are the United States, El Salvador, Honduras, Mexico and Costa Rica.
The main import partners are the United States, Mexico, China, El Salvador and South Korea. The country's trade balance is structurally in deficit, a trend that should continue.
Regional integration is a priority of the Guatemalan foreign policy. The country is a member of System Integration in Central America (SICA). The Union Europenne supports this integration process and it was one of the conditions of a bi-regional agreement. Guatemala is, after Nicaragua, the second largest recipient of European cooperation in Central America and benefits from the communitarian Generalised System of Preferences.
| Foreign Trade Indicators | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 13,576 | 14,547 | 11,531 | 13,836 | 16,610 |
| Exports of Goods (million USD) | 6,898 | 7,737 | 7,214 | 8,466 | 10,463 |
| Imports of Services (million USD) | 2,017 | 2,115 | 2,058 | 2,362 | 2,587 |
| Exports of Services (million USD) | 1,619 | 1,732 | 1,818 | 2,192 | 2,161 |
| Imports of Goods and Services (Annual % Change) | 7.2 | -5.7 | -9.4 | 7.0 | - |
| Exports of Goods and Services (Annual % Change) | 9.4 | -0.2 | -6.2 | 2.7 | - |
| Imports of Goods and Services (in % of GDP) | 42.3 | 39.4 | 32.8 | 34.3 | - |
| Exports of Goods and Services (in % of GDP) | 25.6 | 24.7 | 23.1 | 22.8 | - |
| Trade Balance (million USD) | 5,487 | -5,575 | -3,348 | -4,292 | - |
| Trade Balance (Including Service) (million USD) | 5,797 | -5,851 | -3,507 | -4,446 | - |
| Foreign Trade (in % of GDP) | 67.9 | 64.1 | 56.0 | 57.2 | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| United States | 38.8% |
| El Salvador | 11.7% |
| Honduras | 8.3% |
| Mexico | 5.3% |
| Nicaragua | 4.2% |
| See More Countries | 31.7% |
| Main Suppliers (% of Imports) |
2010 |
| United States | 37.1% |
| Mexico | 11.2% |
| China | 7.1% |
| El Salvador | 4.9% |
| Panama | 3.2% |
| See More Countries | 36.6% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
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- GANA: (Grand National Alliance) - which currently has 23% of the parliamentary seats.
- PP: (Patriotic party - nationalist party), it has 19% of the parliamentary seats.
- Then the FRG (Guatemalan Republican Front) (9%), conservative, whose electorate base is found in the rural population and the PU ( Union Party), 5%. There are a myriad of other parties which collectively account for the remaining 14% of the seats.
Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
Map of freedom 2010
Source: Freedom House
Note: The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: May 2012