Guatemala Jan. economic activity rises 4.4% y/y

Guatemala Jan. economic activity rises 4.4% y/y

Guatemala’s economic activity expanded by 4.4% year-over-year in March 2025, marking a 10-month high and surpassing both February’s 3.5% growth and the pre-pandemic 10-year average of 3.5%. The acceleration was driven by robust performance in domestic trade, construction, and manufacturing, which collectively contributed to the strong headline figure. Annual average growth in economic activity also rose, reaching 3.9% in March, up from 3.7% in February.

External demand remained a key growth driver, with merchandise exports surging 19.5% year-on-year in March, compared to an 8.5% increase in February. The rise in exports is attributed to front-loading activity ahead of anticipated higher U.S. tariffs, a critical trade partner for Guatemala. Meanwhile, remittances continued to support household spending, growing 18.8% annually in March, though slightly below February’s 19.2% increase. The sustained inflow reflects ongoing concerns among Guatemalan migrants in the U.S. regarding deportation risks.

The data underscores Guatemala’s resilience in outpacing pre-pandemic growth trends, fueled by domestic and external demand. However, sustaining momentum will depend on addressing structural challenges, including infrastructure gaps and trade policy uncertainties, as external pressures evolve. Investors are advised to monitor upcoming indicators for further insights into the economy’s trajectory.