Gradual, steady growth will continue in Guatemala

Significance

While private consumption remained strong, driven by remittances and substantial bank credit growth, export performance weakened due to reduced US demand for maquila products, infrastructure bottlenecks and increased competition from Brazil’s coffee sector.

Impacts

• Upcoming judicial elections will affect the government’s ability to advance its reform agenda and tackle long-standing vulnerabilities.
• Double-digit credit growth, especially in consumer and credit card loans, threatens financial stability, despite bank liquidity and profits.
• Increasingly common extreme weather events may worsen infrastructure challenges, hitting agricultural productivity and economic stability.