According to Trading Economics global macro models and analysts, GDP in Guatemala is predicted to reach 84.50 USD billion by the end of 2021. According to our econometric models, Guatemala’s GDP will trend at 87.00 USD billion in 2022.
Is Guatemala a wealthy or impoverished country?
Guatemala’s economy is classified as developing, with a strong reliance on agriculture, notably staple crops like coffee, sugar, and bananas. Guatemala’s per capita GDP is around one-third that of Brazil. Guatemala has the largest economy in Central America. Between 2015 and 2018, it increased by 3.3 percent on average. Guatemala, on the other hand, remains one of Latin America’s and the Caribbean’s poorest countries, with highly unequal wages and chronically malnourished children. Political instability plagues the country, which also lacks skilled employees and infrastructure. Remittances account for approximately a tenth of the country’s GDP.
The peace accords of 1996 put an end to Guatemala’s 36-year civil war and eliminated a significant barrier to foreign investment. Guatemala has pursued significant reforms and macroeconomic stabilization since then. The Central American Free Trade Agreement (CAFTA) between the United States and Guatemala went into effect on July 1, 2006. Since then, increasing investment in the export sector has resulted. With 12% of the population living below the international poverty line, income distribution remains severely unequal. Guatemala is the largest remittance recipient in Central America thanks to its substantial expatriate community in the United States. Inflows account for roughly two-thirds of exports, making them a major source of foreign income.
What is the main source of income in Guatemala?
According to the World Bank, Guatemala has the largest economy in Central America, and it has developed consistently in the twenty-first century. The main three industries are services, manufacturing, and agriculture. Guatemala’s main source of foreign income is remittances from Guatemalans residing abroad.
What is Guatemala’s GDP per capita income?
According to our econometric models, Guatemala’s GDP per capita will trend around 3300.00 USD in 2022 and 3365.00 USD in 2023 in the long run.
What causes Guatemala’s poverty?
- The distribution of wealth is lopsided. Mangrum notes that while larger cities such as Guatemala City, Antigua, and Xela are modern and rich, the villages she visited, such as Chicacao and Suchitepquez on the coast and Chichicastenango and El Quiche in the highlands, are impoverished. “People who live in smaller towns may appear to have more than those out in the villages, but they don’t own any land, so most of the time they are still what you would consider underprivileged,” she explains. Mangrum’s experiences are backed up by statistics. Poverty affects the great majority of the population. Despite the fact that individuals in the big cities have it better, 75 percent of the population lives in poverty, with 58 percent in extreme poverty.
- The indigenous people, who do not understand Spanish, has restricted access to education and opportunity. She found significant contrasts between Chicacao, where the majority of residents are derived from Spanish colonists and speak Spanish, and Chichicastenango, where a Mayan dialect known as Quiche is spoken. Mangrum’s observations are backed up by data once again. More over 90% of Guatemala’s indigenous population lives in poverty, which is greater than the national average.
- In many sections of Guatemala, water and waste management systems are still underdeveloped and unsanitary. “The homes I stayed in had a water source, but it was not pure; we had to filter our water to drink,” Mangrum explains. Some places have flushing toilets and showers, while many are latrines only, with people showering in buckets.” Water for People considers many of the country’s water systems to be in partial or complete collapse. However, there is reason for optimism, as 93 percent of Guatemalans have access to better water, with only 87 percent of the rural population having access.
- Many people in Guatemala rely only on inherited land for income, resulting to cyclical poverty. Because 2.5 percent of farmers possess 65 percent of the land, land is passed down through families, and most people consider farming to be their only option. Many Guatemalans whose parents were poor stay impoverished due to perceived limited possibilities.
- Guatemalans frequently rely on low-wage jobs to supplement their income. According to the United Nations, 70% of Guatemalans are employed informally, which means they do not receive any of the benefits that come with a legal contract and employer.
- Diabetes is a common occurrence in Guatemala due to low-cost rice and tortilla diets brought on by poverty. Type 2 diabetes, according to Mangrum, was the most prevalent health concern she faced in Guatemala. She compared this to the corn tortillas that many of her host families ate as an inexpensive meal. The diabetes rate in Guatemala is not uncontrollable at 7.5%, but 47.7% of the population is overweight, 16.4% of the population is obese, and 12.4% of the population is physically inactive. All of these risk factors raise concerns about diabetes’s potential growth rates.
- In Guatemala, fatalistic beliefs engendered by years of poverty have resulted in widespread dental hygiene issues. Tooth decay is one of the most common problems seen by Guatemalan dentists, and it is caused by a lack of personal awareness and prioritizing of dental care, as well as a lack of fluoride and poor diets. This worldview, according to Mangrum, is based on the hopeless notion that because one’s parents had awful teeth, no amount of prevention will prevent the following generation from getting bad teeth as well. As a result, the majority of the patients Mangrum encountered during her time working at local dental offices chose to have their teeth pulled rather than undergo routine check-ups. Medical missions, according to Mangrum, hold a lot of promise for alleviating poverty in Guatemala. “It is vital to treat the patient’s spiritual health in societies like Guatemala where traditional healing traditions still impact health care,” she says. They frequently believe they are sick as a result of a physical or spiritual imbalance, or that something in their lives, such as sin, is influencing their health.”
- Because many Guatemalans cannot afford to go beyond elementary school, poverty persists in the country. Because most Guatemalan students are expected to help support their families, secondary school is a luxury few can afford. Primary school enrollment is nearly 100 percent, yet more than two million Guatemalans between the ages of 15 and 24 do not meet the requirements to enter the labor. As a result, they either stay on their family farms, cut off from the economy by the farming elite, or enter the informal workforce, resulting in poverty.
Ways to Get Involved
The veracity of these top eight facts concerning poverty in Guatemala may be seen thanks to Mangram’s on-the-ground perspective. With such an eye-opening perspective, many people may wonder what can be done to help with some of these challenges; one of the best solutions, as exemplified by Magnum, is to go directly to the country and offer support through recognized relief organizations.
Other options are more remote in nature contacting representatives in support of foreign aid legislation, donating to sustainable outreach and development programs, sponsoring local businesspeople but regardless of the route, aid to Guatemala can be just as effective and eye-opening as Mangram’s journey.
What is Guatemala’s poverty rate?
Guatemala has the largest economy in Central America, with a population of 18 million people and a GDP of US$77.6 billion in 2020. Guatemala has enjoyed the least unpredictable growth among its structural and aspirational peers over the previous three decades. Public debt and the budget deficit have historically been among the lowest and most stable in the world, allowing the country to weather external shocks. Guatemala is an upper middle-income country, with a GDP per capita of US$4,603 in 2020.
However, despite the economic stability and upper middle-income position, poverty and inequality have not decreased significantly. Low central government revenues (11 percent of GDP on average in recent years, with an estimated 10.8 percent in 2021) limit capacity for public investment and limit both the quality and coverage of basic public services, ranging from education and health to water access, largely explaining the lack of developmental progress and large social gaps, lagging behind the rest of Latin America and the Caribbean (LAC).
Guatemala has the world’s fourth worst rate of chronic malnutrition and the highest in Latin America and the Caribbean, with Indigenous and rural people being disproportionately affected. Malnutrition (and stunting) affects 47% of all children under the age of five, 58 percent of indigenous children, and 66% of children in the lowest poverty quintile.
Guatemala’s three decades of economic progress were halted by the COVID-19 pandemic. Despite this, the country had one of the smallest GDP contractions in Latin America in 2020 (-1.5 percent), with economic activity already returning to pre-pandemic levels in the first quarter of 2021, aided by a record-high remittance influx.
The government’s fiscal stimulus (equal to 3.3 percent of GDP) to respond to the pandemic in 2020 was rapid and focused on safeguarding the poor and vulnerable. Through interim cash transfers, this extraordinary initiative involved a massive scale-up of safety nets from 5% to 80% of households.
Poverty grew significantly from 45.6 percent to 47 percent of the population by 2020. Without social security services, poverty in Guatemala is expected to have climbed three to four times. In 2021, the poverty rate is expected to drop to 45.9%.
Guatemala is forecast to have a strong recovery, with GDP expected to expand by 5.1 percent in 2021 and 4.1 percent in 2022. There are still risks, especially given the uncertainty surrounding COVID-19’s progress. During the third quarter of 2021, the Delta variety produced a surge in new infections, and only 15% of the population had been properly vaccinated by September. Economic recovery could be hampered if the public health issue deepens.
Boosting robust, inclusive growth and reducing poverty in Guatemala will necessitate continued efforts to increase productivity growth and ease women’s entry into the labor market; increase investments in human capital, innovation, and resilient infrastructure; and address challenges in transparency, governance, and citizen security, among other things.
Is Mexico a wealthier country than Guatemala?
2.4 times the amount of money Guatemala has an annual GDP per capita of $8,200, while Mexico’s annual GDP per capita is $19,900.
Is Guatemala classified as a third-world country?
Guatemala, despite its beauty, is still suffering from the impacts of its long civil wars. Safety may still be an issue in some parts of the country. The country continues to execute economic development policies.
There is an insufficient supply of clean water in several sections of the country. As a result, waterborne diseases have become common. NGOs’ efforts, on the other hand, have greatly improved the situation. Sanitation is a significant issue.
PILLAR RANKINGS
Guatemala is the best in terms of Economic Quality and Social Capital, but the worst in terms of Human Capital.
Governance. In comparison to a decade earlier, the most significant improvement was in Economic Quality.
What is Guatemala’s most important industry?
Guatemala has Central America’s largest economy. As a result, anyone looking for business prospects in Guatemala should take a look at the country’s most important industries.
Manufacturing (20 percent), trade (18 percent), the private sector (14 percent), and agriculture (14 percent) account for more than half of Guatemala’s economic activity (12 percent ). Furthermore, Guatemala has the world’s 80th largest export economy. The value of its exported commodities is estimated to be over US$ 11.8 billion, according to statistics.