Economy of Guatemala
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Guatemala's Gross domestic product for 2000 was estimated at $19.0 billion, with real growth slowing to approximately 3.3%. After the signing of the final peace accord in December 1996, Guatemala was well-positioned for rapid economic growth over the next several years.
Guatemala's economy is dominated by the private sector, which generates about 85% of GDP. Agriculture contributes 23% of GDP and accounts for 75% of exports. Most manufacturing is light assembly and food processing, geared to the domestic, U.S., and Central American markets. Over the past several years, tourism and exports of textiles, apparel, and nontraditional agricultural products such as winter vegetables, fruit, and cut flowers have boomed, while more traditional exports such as sugar, bananas, and coffee continue to represent a large share of the export market.
The United States is the country's largest trading partner, providing 41% of Guatemala's imports and receiving 34% of its exports. The government sector is small and shrinking, with its business activities limited to public utilities--some of which have been privatized--ports and airports and several development-oriented financial institutions. Guatemala was certified to receive export trade benefits under the United States' Caribbean Basin Trade and Partnership Act (CBTPA) in October 2000, and enjoys access to U.S. Generalized System of Preferences (GSP) benefits. Due to concerns over serious worker rights protection issues, however, Guatemala's benefits under both the CBTPA and GSP are currently under review.
Current economic priorities include:
- Liberalizing the trade regime;
- Financial services sector reform;
- Overhauling Guatemala's public finances;
- Simplifying the tax structure, enhancing tax compliance, and broadening the tax base.
- Improving the investment climate through procedural and regulatory simplification and adopting a goal of concluding treaties to protect investment and intellectual property rights.
Import tariffs have been lowered in conjunction with Guatemala's Central American neighbors so that most fall between 0% and 15%, with further reductions planned. Responding to Guatemala's changed political and economic policy environment, the international community has mobilized substantial resources to support the country's economic and social development objectives. The United States, along with other donor countries--especially France, Italy, Spain, Germany, Japan, and the international financial institutions--have increased development project financing. Donors' response to the need for international financial support funds for implementation of the Peace Accords is, however, contingent upon Guatemalan government reforms and counterpart financing.
Problems hindering economic growth include high crime rates, illiteracy and low levels of education, and an inadequate and underdeveloped capital market. They also include lack of infrastructure, particularly in the transportation, telecommunications, and electricity sectors, although the state telephone company and electricity distribution were privatized in 1998. The distribution of income and wealth remains highly skewed. The wealthiest 10% of the population receives almost one-half of all income; the top 20% receives two-thirds of all income. As a result, approximately 80% of the population lives in poverty, and two-thirds of that number live in extreme poverty. Guatemala's social indicators, such as infant mortality and illiteracy, are among the worst in the hemisphere.
Statistics
GDP: purchasing power parity - $56.5 billion (2003 est.)
GDP - real growth rate: 2.1% (2003 est.)
GDP - per capita: purchasing power parity - $4,100 (2003 est.)
GDP - composition by sector:
agriculture: 22.5%
industry: 18.9%
services: 58.5% (2003 est.)
Population below poverty line: 75% (2002 est.)
Household income or consumption by percentage share:
lowest 10%: 1.6%
highest 10%: 46% (1998)
Inflation rate (consumer prices): 5.5% (2003 est.)
Labor force: 3.84 million (2003 est.)
Labor force - by occupation: agriculture 50%, industry 15%, services 35% (1999 est.)
Unemployment rate: 7.5% (2003 est.)
Agriculture - products: sugarcane, maize, bananas, coffee, beans, cardamom, cattle, sheep, pigs, chickens
Industries: sugar, textiles and clothing, furniture, chemicals, petroleum, metals, rubber, tourism
Electricity - production: 6.237 billion kWh (2001)
Electricity - production by source:
fossil fuel: 26.42%
hydro: 66.61%
nuclear: 0%
other: 6.97% (1998)
Electricity - consumption: 5.559 billion kWh (2001)
Electricity - exports: 336 million kWh (2001)
Electricity - imports: 95 million kWh (2001)
Oil - production: 21,080 barrel/day (2001 est.)
Oil - consumption: 61,000 barrel/day (2001 est.)
Oil - proved reserves: 263 million barrel (1 January 2002)
Natural gas - proved reserves: 1.543 billion m³ (1 January 2002)
Exports: $2.763 billion f.o.b. (2003 est.)
Exports - commodities: coffee, sugar, bananas, fruits and vegetables, cardamom, meat, apparel, petroleum, electricity
Exports - partners: US 56.7%, El Salvador 10.8%, Nicaragua 3.6% (2003)
Imports: $4.5 billion (c.i.f., 1999)
Imports - commodities: fuels, machinery and transport equipment, construction materials, grain, fertilizers, electricity
Imports - partners: US 34.1%, Mexico 8.8%, South Korea 7.8%, El Salvador 6.4%, China 4.6% (2003)
Debt - external: $4.957 billion (2003 est.)
Economic aid - recipient: $250 million (2000 est.)
Currency: 1 quetzal (Q) = 100 centavos
Exchange rates: quetzales per US dollar - 7.9409 (2003), 7.8216 (2002), 7.8586 (2001), 7.7632 (2000), 7.3856 (1999)
Fiscal year: calendar year