Guatemalan exports were reviewed downward in April, so 2% and not 5% will grow, which was the initial value to be at US $ 14,449 million, about US $ 291 million more than last year, but less than expected.
The tariff policy implemented by the US government towards other commercial partners and the possible reduction of demand, which is reflected in the consumption of that country, are some of the factors that have an impact on international trade, and Guatemala will also be affected with the loss in dynamism.
The review of the Gross Domestic Product (GDP) by the Monetary Board (JM), in the session last Wednesday, now places it at 3.8% as a central value, and not 4%. Some indicators were also reviewed, and the projection of foreign sales growth is 2%, and not 5%, as expected in the forecasts released in December 2024. Contrary to this, the entry of family remittances was adjusted up to 9%, and not at 6%.
With the information obtained during the first quarter of the year, plus the recent reports on the performance of the global economy by the International Monetary Fund (IMF) and the World Bank (BM), the JM made official the performance of the different indicators, and the most relevant are exports and remittances, by the external link.
The export sector had already anticipated an effect on exports during 2025 and tries to diversify and locate other spaces to do business, given the slowdown of sales towards the US, which is the natural market of Guatemala.
Despite the downward review, exports currencies will be maintained in positive terrain for this year.
What is the stage
Álvaro González Ricci, president of the Bank of Guatemala (Banguat), explained yesterday to Press Libre that there are still no figures for the first trimester of exports, but the data until February indicate that they have been growing at a rate of 6.9%.
This performance would be associated with the increase in volume, although the average price has decreased.
He clarified that this would mean for the first quarter of this year an increase in exports, and some international analysts in the United States have explained that it is an increase in imports from that country, “because some entrepreneurs anticipated the commercial conflict.”
In that trend, he pointed out that Guatemala exports to the US. They have been growing at the warning of the imposition of tariffs during the first quarter, so purchases were anticipated and for that same reason the global trade was dynamic
“As of February, exports grew 6.9% and it is expected that in the first quarter it will be positive,” reiterated the president of the central bank.
According to data and review, exports will be contracted at about US $ 468.8 million and a closure of US $ 14,849 million for this year is expected. The central scenario released in December 2024 was 5%growth, to be at US $ 15 thousand 317 million.
Notorious effect
After reviewing exports from 5% to 2% by the JM, a reduction in Guatemala’s participation in this year’s following quarter is anticipated.
In the first quarter the indicator has a positive evolution, but for the next three there are expectations down depending on what happens in the United States, since in April there were three corrections.
In that sense, it is possible that the measures are also “relaxed” and that they do not affect so much, as the IMF announced.
“The first quarter is very positive and very sure that the same thing happens in the second quarter, and that the effects begin in the second part of the year, if commercial restrictions are maintained to the United States,” González Ricci said.
Then, it is expected that, in the second semester of 2025, the effects will be seen if protectionism policies are maintained. The head of the Central Bank reiterated that there is too much uncertainty in the international market.
More sensitive products
In the analyzes presented by the Banguat, foreign trade is defined by those products that are quoted in international price markets, such as coffee, sugar or bananas, prices that are very dynamic because every day there are quotes.
Of these Guatemala products it is very important in the export basket to the US, of coffee, sugar and bananas, but the behavior will depend on international prices that are determined.
On the other hand, there are products such as costume articles that also Guatemala has an important share in the northern country, it does not have an international market, but prices are defined between supply and demand in the US market. This item can be more affected, as are export fruits and legumes that do not have a market or sugar.
Global context
By consulting what Guatemala’s position would be with respect to other countries in the face of the impact on exports for tariff policy, he explained that there is a characteristic that the impact is general to all countries, because initially there was talk of a high tariff for certain countries and that meant that there could be opportunity when it was an important competitor. But by putting tariffs on all, it makes it more difficult to determine the affectation and impact on consumer costs.
In the US, consumption is reduced, which impacts the demand for exports. In addition, there is an economic slowdown, which decreases commercial opportunities at a general level, so market behavior will depend on negotiation capacities between suppliers and buyers.
By 2026 exports will remain in growth between 6% and 8% and, according to González Ricci, “usually when there is a difficult year, economic activity is recovered during the following year, but the changes that may occur will continue to be carefully observed.”
More remittances
The JM also reviewed the entry of currencies through family remittances. The central value of transfers increased to 9% from an expected 6% rate. It is expected that next December the amount will be at US $ 23,446 million.
The monetary authority explained that only in March the growth was 20%, and with data to April 24 the indicator shows an increase of 16.7%. “That increase above what I had been observing is for precautionary reasons, given the possibility of deportation. There is the precaution of having savings and that will make the growth rate reach 9%,” he said.
It was already expected
Amador Carballido, general director of the Guatemalan Association of Exporters (AGEXPORT), indicated that certain conditions are presented in the world market, especially with the American – with which there is a relationship of more than 30% of exports -, of uncertainty, which can cause the percentage of sales amounts to reduce.
“In the perspectives, the decrease adjustment was similar to the one presented. Then, the actors at this time have too many issues to resolve to be more certain, such as inflation or possible recession in the United States. Consumption is reduced, and in terms of 10% increase to the tariff fee, there will be products that can absorb it and others that do not The exporter’s attitude could also be affected, ”he explained.
The manager pointed out that the high season of Agriculture did not affect much because it is about to end in June, but that it can affect other manufactured products.
As emerging measures, measures such as the diversification of destinations such as Central America and South America are taken, the adaptation of European regulations to be able to dispatch more volume and “in this crisis we see that Europe can assume something that was sent to the United States.”
He clarified that the times for diversification are long because it means developing markets, finding logistics routes and for some products to have the labeling, as well as negotiations and risks of payment, but “it is the alternative.”
Alejandro Ceballos, vice president of the costume and textile commission (Vestex), commented that the expectations of the sector for this year have been impacted by the changes in the tariff policies that the US government has implemented under the Law of International Emergency Economic Powers (IEEPA, in English).
“The sector has grown in recent years at a rate between 4% and 6%, which we consider that for this year it will be reduced by the uncertainty that is being changed to tariffs and the time that buyers are taking to evaluate in which countries place their orders,” he said.
“See you with a disadvantage against Mexico and Canada, because the original products do not have a 10%tariff, as we have the countries of the DR-CAFTA, however, we receive customers who are seeing Guatemala and the region as emerging countries to be alternative producers of what is produced in China, mainly,” Ceballos added.