Guatemala 

Guatemala country policy

Policy established 07 June 2010

• ILC, bank guarantee or central public guarantee (unconditional)
• The country ceiling is 1000 mln euro
• Early warning signal 200 mln euro
• - of which was used as at 2010-07-31 0 mln euro

Country class: 5

Guatemala country facts

Atradius Dutch State Business Economic Research
Country Report last updated :  25 April 2010

Country :  GUATEMALA 

Political Situation
Weak Governments In A Violent Society

Head of state
President Alvaro Colom Caballeros.

Form of government
Administration headed by the centre-left Unidad Nacional de la Esperanza (UNE).

Internal Economic Situation
Recovering From Recession In 2009

General situation
After years of sustained GDP-growth, the economy was badly hit in 2009 by weaker export markets and fallen domestic demand as workers’ remittances have dropped by appr. 10% and commercial banks’ credit conditions were tightened. Real GDP declined by 0.2% in 2009. Strong disinflation from a high 14% mid-2008 to only 1.9% 2009, well below the 4-6% CB-target range. Rather high corruption: 84th out of 180 in the TI Index.  
 
External Economic Situation
Reasonable Liquidity And Solvency

Main sources of foreign exchange
Private transfers, coffee (28%), sugar (12%), bananas (7%),  apparel, tourism.

Main foreign markets
United States (50%), Latin America (37%), EU (5%).

Main expenses of foreign exchange
Raw materials/intermediate products (51%).

 
Balance of payments  
Trade deficits are being financed by private and official transfers and capital imports but since 2008 not fully, leaving finance gaps. About 10% of the population is living in the USA, transferring >8% GDP. Managed floating quetzal: after years of relative stability, depreciation in 2009 by 8% vs US$.