Commercial uncertainty would affect country’s exports and economic growth, analyzes former president of the Banguat

The president of the United States, Donald Trump, is convinced that the tariff threat is a key negotiation tool. However, the constant changes of opinion on tariffs earlier this month shook the markets, feeding uncertainty for US companies and consumers.

Trump said on March 30, that he could ultimately reach agreements on tariffs after he entered into force on April 2 and has proclaimed him as the “day of liberation”, promising reciprocal tariffs on imports from foreign countries about a variety of products.

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Sergio Recinos Rivera, former president of the Bank of Guatemala (Banguat) and the Monetary Board (JM), comments in an interview with Free press, That there are short -term indicators that are marching well in the national economy, but due to the international context there could be an affectation to the local productive system by external route, especially in the part of exports.

In your perspective, how does the global economy go?

With respect to the world economy in this first quarter, there has been an environment of greater uncertainty derived mainly from the change of economic policy in the United States tariffs to Canada, Mexico, China, European Union, as well as by immigration policy and other issues of geopolitical nature (conflict between Russia-Ukraine, Gaza Strip, NATO, among others). This has introduced is a lot of volatility to shareholders, goods and services markets and foreign investment flows, among others.

This has led some organisms to review their economic growth estimates of the global economy.

Likewise, inflation in the USA, in the last month it was above the expected, which has led to the Federal Reserve (Fed) to reconsider its position of monetary policy, that is, contrary to what was estimated in January of continuing with casualties in the interest rate, now there is talk of the possibility that it increases again, which could affect even more impact on a deceleration in economic growth. The latter could contract the demand for exports of its main commercial partners.

How does the internal economy analyze?

As for the local economy, although the main short -term indicators show positive behavior, a decrease in the demand for exports that eventually translates into lower economic growth for this year and 2026 cannot be ruled out.

In this situation, why is the monitoring of the migratory and tariff measures that the US is executing?

For greater uncertainty of the world economy and the greatest volatility of markets can have an impact on national economic growth and foreign trade.

Likewise, the hardening of immigration policy can influence the flow of family remittances in a medium -term horizon, as well as employment levels in Guatemala.

On the horizon, are there or not threats to the global economy?

Of course, important threats and risks are observed in investment, trade, economic growth and the possibility that prices increase worldwide, which would force central banks to harden their monetary policy again with increases in interest rates, more increasing credit and therefore reducing consumption and investment. Additionally, risks derived from international geopolitical conflicts.

In that sense, what possible effects could be expected in Guatemala?

Some effects that could feel in the country would be related to a slowdown in economic growth, a decrease in employment levels, as well as a decrease in Guatemala exports, especially towards the United States.

The authorities have advanced on a possible slowdown in the US economy. How will it move in the short, medium and long term?

Indeed, some international organizations have reduced their forecasts of economic growth for the world economy and Fed itself reduced its growth forecasts for the United States economy.

In this sense, it seems to me that the same could be doing the IMF in its revision of economic growth now in April, when it frequents to publicize its review of economic perspectives based on what has been happening in the first quarter of the year.

This is transferred by real channels, that is, it would have an impact on economic growth and foreign trade, as well as through financial channels, by increasing interest rates, a situation that could affect capital flows and foreign investment.

What will be the signs that can reflect the deceleration in the US.

In addition to the employment and inflation data, the consumer and business confidence trusted indices that have been falling. Another indicator is the chances of a recession in the US.

There are some analysts that are even talking about the possibility of a kind of stagflation in the US, that is, low economic growth with a higher inflation rate.

How have you seen the performance of some short -term indicators in Guatemala?

In general terms, the main short -term indicators show positive behavior, that is, we see a low inflation rate of 1.79% to February, which is below the lower limit of the goal established by the Monetary Board; Likewise, family remittances in mid -March have shown significant growth of 18.4%, credit to the private sector growing at an interannual rate of 10.4% and the other monetary aggregates with positive interannual growth.

In the case of exports, growth is moderate of 4% according to exchange balance data in mid -March. However, as stated, due to this world uncertainty and the high volatility of the markets, a decrease in the demand for exports that eventually translates into lower economic growth for the present and next year cannot be ruled out.

In this situation, what would your message to the economic agents at the global situation?

It seems to me that before the current international situation you have to be cautious and act with caution in savings and investment decisions. Consumers must also be cautious and try to guide some resources towards savings and avoid over -indebtedness to the possibility of new increases in interest rates.

The Monetary Board analyzes possible effects

The authorities of the Monetary Board announced their position regarding the performance of the indicators registered in the first quarter, the influence of the global context and especially the measures that the United States is taking.

Álvaro González Ricci and José Alfredo Blanco Valdés, president and vice president of the Bank of Guatemala (Banguat) as well as Jonhy Gramajo Marroquín, economic manager reported that the base scenario is that the United States economy grows 2.7% that is a vigorous indicator for that country; But certainly a protectionist policy of the current government administration of imposition of tariffs and a immigration policy, generates risks to the country’s economy and others that are linked.

They explained that the risks of the US economy are biased down, and the way in which Guatemala is transmitted for a slowdown is usually due to family remittances, exports, and to a lesser extent due to foreign direct investment (FDI).

In the observed variables, they commented that, during the first quarter, it is that family remittances have been growing beyond the foreseen that in the short term does not generate downward risk for economic growth, since it could grow beyond the expected.

In foreign trade, the only information available is January, so it is premature to do an analysis, but exports are growing 4.4% that goes in line with the growth forecast between 4% to 6% by 2025.

Authorities’ analyzes suggest that until now there is no affectation by means of family remittances, but in trade and especially for exports due to the type of sales that are carried out to the United States they are raw materials are stable in time does not represent a risk, “the only export that could really worry about a strong deceleration of the United States. the income of American citizens. ”

As for the economy in Guatemala, it is projected with a central value of 4% and would be associated with a dynamism of internal factors, private consumption through family remittances, salaries and bank credit that maintains a stable level growing above 4%; A higher public spending compared to 2024 that boost economic growth, but will depend on the degree of its execution and an increase in gross fixed capital formation (investment) by public spending is expected.