In the downward review of Guatemala’s economic growth projections for 2025, the Monetary Board dropped the forecasts for several sectors between agriculture, passing it from 1.1%, according to the initial estimate, to 0.8% in April.
The agricultural sector has a 9.5% participation in the Gross Domestic Product (GDP) of the country, refer to data from the Bank of Guatemala (Banguat), one of the three largest, only below the trade sector and vehicle repair with 21.4% and that of manufacturing industries, with 13.4%.
The projections of the country’s economic growth went from 4% to 3.8% for 2025, and from the 17 sectors classified by the Banguat, six were reviewed downward growth projections.
In this regard, the agricultural sector manager of the Guatemalan Association of Exporters (AGEXPORT), Fernando Zuloaga, said that in the first quarter of 2025 there was a good behavior in exports, but coincides in the analyzes that the sector will be affected in the remainder of the year derived from the impact of the United States commercial policy. Especially because it puts Guatemala at a disadvantage, which was set 10% of tariff, with respect to Mexico that left zero percent respecting the preferential rates of the Free Trade Agreement that the three North American countries have.
In your opinion, some of the products that could be most affected are vegetables and vegetables and that the impact could be very serious for producers and exporters. This taking into account that many are micro, small and medium producers and are linked to export chains, the executive said, for example, the Guatemalan Altiplano, remembering that many producer organizations are part of the chain with industries and exporters to send their product outside the country, including the United States. Even many of these organizations participate many women, he added.
Apart from this, the impact that there is due to the conditions of the country’s infrastructure as roads and agricultural structure as irrigation or also known as hydroagrícola, because they affect competitiveness, should be taken into account. Another factor is the high logistics costs due to the issue of ports and the impact that United States decisions can have on trade, transport and logistics within the commercial war with China.
Zuluaga says that the other serious problem is added as the port in which the operation is needed to be more efficient and competitive, there are also container limitations for export and the cost is high. Now the other problem that the United States will apply other positions to Chinese ships or that have Chinese components, which will impact the chain such as shipping companies as importers and exporters, and possibly to producers and consumers.
“The impact on the economy as a whole is being reflected in the analysis of Guatemala and in particular the inclusion of 10%tariffs,” on the part of the United States, since it should not be forgotten that there is a neighbor like Mexico to which zero percent of tariffs apply, especially in the agricultural issue, he said.
That for the producers of vegetables, fruits and legumes represents them an unfair competition because I could not compete with the conditions of the proximity of the production areas of Mexico with the United States, but now impose the tariff, he mentioned.
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He adds that apart from seeking to reduce the tariff, in the country you must work in the hydro -agricultural structure so that instead of a harvest the small and medium producers could have two or three a year.
“The most affected products in the rest of the year can be vegetables, vegetables and fruits, there is permanently export of peas, broccoli and others. It is a dynamic that Guatemala has it very well managed and that every day is seeking to improve competitiveness T production,” said the Agexport executive.
For example, at this time the US tariff measure entered into force in full export mango harvest, and an impact is expected, in addition that the country has been preparing to authorize the importation of the United States of Avocato Hass produced in Guatemala, but now it will be more difficult to compete with Mexico by the tariff, he added.
“If we do not strengthen infrastructure, access to financing or credit, agricultural and hydro -agricultural structure, we will continue without being able to promote competitiveness,” he said.
“I’m optimistic”
Asked the Minister of Economy, Gabriela García, on what economic plans are to assume the situation that is being recorded in the world, the official said that Guatemala is part of a series of policies that do not depend on the country.
And, regarding the projection of the Banguat, which reviewed the country’s economic growth by 2025, he said: “There have been no comments or accusations that indicate that our economy will slow down beyond the expected minimum. I do not have the numbers right now, but with the low inflation we have in a very good position to handle not only the tariff issue, but in general the programs that this government already has to ensure growth” and also That last week a new program was launched to train people on semiconductor issues, a program with which it seeks to diversify the economy, increase productivity, make new processes that allow to bring new different companies to the country and that those that are already in the technological ecosystem may have the opportunity to grow.
“I am optimistic, I have always been,” Garcia added.
Several factors impact
Carla Caballeros, executive director of Camagro, referring to the possible reasons for a decline in the projections of the annual growth of the agricultural sector, attributes it to several factors that impact, among these the issue of tariffs imposed by the United States.
Another aspect that could affect is the behavior of possible contraction of economic growth in the United States, since 30% of exports from Guatemala go to that country, or the possibility of contraction in other destination markets.
Also other factors, such as internal problems associated with more costs and delays, such as roads and ports, which affect the capacity and agility of production of production, and could also be the increase in the minimum wage that was set for this year.
Caballeros explained that, after a month of the 10% tariffs set by the United States, which entered into force on April 5, 2025, the first effects are beginning to be known, and during the past week they already began receiving news from exporters that announced that buyers are already carrying the total of the new tariff to exporters.
Although in some cases they are considering working in the remainder of the year in a scheme in which each part absorbs 5% of the cost between the buyer and the exporter, in most cases they are talking about 10%.
Among the effects, said the executive, “it is important to understand that Guatemala, for the type of products we export, we are a price maker and not one that sets prices in the international market,” so in the case of agricultural products, they are generally sensitive markets at prices by consumers. Purchase contracts between the international buyer, international supermarkets and Guatemalan exporters have clauses in which some unplanned modifications are transferred to the exporter or producer.
In addition, due to the sensitivity of prices, they are providing that for the new contracts for the following seasons this cost … that cost, in a sector where its profit margin is less than two digits, has a very strong impact. Absorbing an additional cost of 10%, added to the additional costs that are not seen but that the producers already have due to the lack of infrastructure, due to poor quality and lack of maintenance to roads, and lack of competitiveness, can at some time, in individual cases, leave a company without being able to compete and unable to stay in the market.
The additional cost can put at risk the capacity of a company not only to continue producing for that market in the United States, but also towards other minor markets, if it is affected by its main buyer.
In other cases, such as coffee, which is exported to some European countries, they give added value and are then re -supported to the United States, they will also have a tariff. “That is why we are talking about the impact can be beyond the total exports of Guatemala.”
In the case of the Agro de Guatemala Chamber (Camagro), he disclosed this week his macroeconomic report of the first quarter, prepared by the firm Cabi. Although in that period the effect of the tariffs of the president of the United States, Donald Trump, the business organization has expressed its concern and impact on this is not reflected.
According to the study in question, at the end of 2024, the growth of the GDP of the agro sector reflected one of its lower performances in recent years, since together it showed a growth of just 0.1%, while the country closed with a growth of 3.7%.
The low performance was aggravated especially by cardamom, as well as some vegetables and sugarcane cultivation, while the rest of agricultural products, as well as livestock, fishing and silviculture showed better or moderate performances, adds the camera.
By 2025, according to the Camagro Bulletin, the panorama is more encouraging especially promoted by the performance that agricultural exports reflect during the first months of the year, among these of coffee and sugar that record increases of more than 80% in the first two months of the year compared to the same period of the previous year. Meanwhile, banana exports, fruits, legumes and natural rubber also show increases, although more moderate.
“The expectations for the rest of the year are favorable, although dependent on the impacts that may mean the tariff policies of the United States,” adds Camagro.
Citing data from the CABI, it mentions that the country’s annual GDP growth is projected for the closure of 2025 in 3.8%, and the growth of the agriculture sector would be 1.5%.
Although it is still projected higher than in 2024, when it closed at 0.60%, and 2023, which stood at 1.40%, would be lower than that of 2021 and 2022 that was recorded at 4.30% and 2.50% respectively, according to that analysis.
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The Camagro and Business Commission of International Commercial Negotiations (Cencit) have indicated that the new 10% tariff rate represents and cost up to US $ 1.5 million daily because many buyers who import to the United States are asking that Guatemalan exporters assume that new cost.
In mid -April, the Chamber, presented the factors that are at stake in Guatemala by noticing disadvantages with respect to Mexico.
One of these, he says, is that 30% of Guatemalan exports are allocated to the United States, including multiple agricultural products.
- The agricultural sector has more than 1 million rural and urban jobs in Guatemala that are directly or indirectly linked to agricultural export activity, and especially to the United States, so they fear impact on thousands of jobs.
- And detail the factors at play: Formal employment in the export sector, attractive for productive investment, strategic position of Guatemala in regional value chains, the United States represents more than 32% of total exports, is the main destination for agricultural products such as coffee, banana, sugar, vegetables and fresh fruits
- The total exports of Guatemala to the United States in 2024 were US $ 4,614 million, and when making a simple estimate, the cost of 10% tariff would be about US $ 461 million.
- Of the total exported, around US $ 1,974.1 million were from the agricultural sector, according to AGEXPORT data.