Guatemala - Market OverviewGuatemala - Market Overview
Guatemala is the northernmost country in Central America with Mexico to the north and west, Belize and the Atlantic Ocean to the east, Honduras and El Salvador to the southeast and the Pacific Ocean to the south. Famed for its volcanoes, lakes, textiles, Mayan ruins, and temperate climate in the highlands, Guatemala is the gateway to a large regional market for U.S. goods and services.
Guatemalan GDP reached an estimated USD 75.61 billion in 2017, and the Bank of Guatemala anticipates 3.1-3.8 percent growth rate in 2018. The United States and Guatemala enjoy a growing trade relationship, which became even stronger after the entering into force of the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). As of January 1, 2015, 100 percent of U.S. consumer and industrial goods enter CAFTA-DR countries duty free (for goods that meet the country of origin requirements). The United States is Guatemala’s largest trading partner accounting for nearly 40 percent of Guatemala’s trade.
U.S. merchandise exports to Guatemala were USD 7 billion in 2017. Leading U.S. exports to Guatemala include petroleum products, machinery, cereals (corn, wheat and rice), processed food, electrical equipment, plastics, paper and paper board products, motor vehicles, cotton yarn and fabric. U.S. imports from Guatemala were USD 4 billion in 2017, a slight increase from 2016. U.S. imports include agricultural products such as bananas, melons, sugar, vegetables and coffee (43%); apparel and accessories (34%), food and related products, gold, petroleum products, and primary metal manufactures.
Foreign direct investment (FDI) was USD 16.2 billion in 2017, an 11 percent increase from 2016. Activities that attracted most of the FDI flows over the last three years were commerce, manufacturing, electricity, banking and insurance, and telecommunications.
U.S. products and services enjoy strong brand recognition in Guatemala, and U.S. firms have a good reputation in the Guatemalan marketplace. It is estimated that approximately 200 U.S. firms have a presence in the market.
With a population of around 16 million, it is the most populous country in Central America and accounts for more than one-third of the region’s GDP. The capital, Guatemala City, has a population of approximately 4 million and features first-class hotels and restaurants.
A key component to Guatemala’s economy is remittances from migrants, most of whom have settled in the United States. In 2017 remittances increased by 14.4 percent and were equivalent to 10.8 percent of the GDP.
The United States is Guatemala’s most important economic partner. The Guatemalan government (GoG) continues to enhance competitiveness, promote investment opportunities, and work on legislative reforms aimed at supporting economic growth.
Guatemala Trade Development and Promotion