|Guatemala's GDP for 2001 was estimated at $20.0 billion, with real
growth slowing to approximately 2.3%. After the signing of the final peace
accord in December 1996, Guatemala was well-positioned for rapid economic
growth over the next several years, though a financial crisis in 1998
limited its ability to achieve its potential growth rates.
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. Because of Guatemala's continued reliance on coffee exports, the recent downturn in world prices has contributed to Guatemala's relatively slow growth over the past 2 years.
The United States is the country's largest trading partner, providing 35% of Guatemala's imports and receiving 27% 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 Basic 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 Guatemala's benefits under both the CBTPA and GSP were reviewed in 2001. After passage of labor code reforms in May 2001, and the successful prosecution of labor rights violations against banana union workers dating to 1999, the review was lifted.
Current economic priorities include:
Problems hindering economic growth include high crime rates, illiteracy
and low levels of education, and an inadequate and underdeveloped capital
market. 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. A rural
economic crisis caused by drought and low coffee prices hit in 2001, and
continued into 2002, causing severe malnutrition among the rural poor.
U.S. disaster assistance and food aid was provided to address the crisis,
power parity - $46.2 billion (2000 est.)
SOURCES: The World Factbook, U.S. Department of State
Mother Earth Travel > Country Index > Guatemala > Map Economy History