Policy and Macroeconomics in Guatemala

Guatemala is a presidential republic located in northern Central America, bordering Mexico and Belize. With a total territory of 108.889 square kilometers, Guatemala is almost the same size as Pennsylvania. Geographically, Guatemala is a bi-oceanic country with coasts along the Pacific and Atlantic Oceans (Caribbean Sea), totaling 400 kilometers of coastline. Likewise, the country is dominated by mountainous highlands and northern lowlands.

Currently, Guatemala has a total population of 16.6 million citizens, with an average age of 23 years. Furthermore, about 51% of the population lives in an urban setting, notably the capital of Guatemala City with its 2.9 million inhabitants.

Policy and Macroeconomics in Guatemala

The annual gross domestic product (GDP) of Guatemala is US$138 billion (PPP) and the national economy has experienced positive economic growth upwards of 2.8% in recent years. As of today, the national economy is divided into 13% agriculture, 24% manufacturing, and 63% services. Meanwhile, the national labor force is divided into 31% working in the agriculture industry, 13% working in the industrial sector, and 56% working in services. Similarly, the national agriculture industry utilizes about 41% of the national territory, while another 34% is forested.

In terms of natural resources, Guatemala has petroleum, nickel, rare woods, fish, chicle, and hydropower. Within manufacturing, the national industry is focused on sugar, textiles, clothing, furniture, chemicals, petroleum, metals, and rubber. Likewise, a significant amount of Guatemala’s economic activity is dependent upon tourism. Simultaneously, the country’s agricultural industry has as main products sugarcane, corn, bananas, coffee, beans, cardamom, cattle, sheep, pigs, and chickens.

In terms of trade, Guatemala is the world’s 80th largest export economy. During 2016, the country imported US$16.8 billion worth of goods and exported US$11.6 billion, resulting in a trade deficit of US$5.3 billion. Furthermore, that same year, the country’s main export, representing 9.3% or US$1.1 billion of the total, was bananas. On the other hand, Guatemala’s main import, representing 11% or US$1.8 billion of all international purchases, was refined petroleum. Meanwhile, Guatemala’s main trading partners are the United States, El Salvador, Mexico, China, and Honduras.

Unfortunately, in Guatemala, some 2.6 million people suffer from undernourishment. In recent years, the average per capita protein intake of animal origin amongst the Guatemalan population has been 17 grams daily. Simultaneously, land distribution and output in the country have evolved throughout the last half century. Back in 1961, permanent pastures and meadows in Guatemala covered 1.1 million hectares, while arable land also covered 1.1 million hectares and permanent crops covered 436.000 hectares. More recently, by 2016, permanent pastures and meadows had increased to cover 1.8 million hectares, while arable land represented 862.000 hectares and permanent crops accounted for 1.2 million hectares.

(Read more about President Duque’s Tax Overhaul is a Win for Agribusiness)