Guatemala leads Central America with a GDP of US $76 billion and is the regional country that projects the greatest economic recovery after the pandemic, exploiting new commercial sectors such as tourism, construction, the financial sector, and free zones.
Guatemala represents 35% of the economy in the region and stands out for maintaining stability in the main macroeconomic indicators of inflation, exchange rate, interest rate, and fiscal deficit with great competitive advantages in economic and sociodemographic terms. It also has macroeconomic stability with 24.6% of public debt as a percentage of GDP, which is not only the lowest level of sovereign debt in Central America but also the lowest in Latin America.
Guatemalan products have an increasingly large share in the main world markets. From Guatemala, the world is supplied with clothing items, organic and high-value agricultural products, alcoholic and non-alcoholic beverages, and even industrial refrigerators and electrical energy. Mainly, Guatemalan products stand out in markets such as the United States, the rest of Central America, European countries, and Mexico. The country has commercial agreements to promote its commercialization in the main world markets. It has established trade agreements with more than 10 important markets around the world, which allow the entry of thousands of local products with less tariff and non-tariff restrictions.
Infrastructure and Energy
Guatemala has the most modern infrastructure in Central America with a road network extending 14,000 km. The country also has the most successful electricity system in the region. It has enabled important national and foreign investments to be established in the generation and distribution of electric power, becoming the most competitive country at the regional level, offering the lowest costs in Central America. The connection of new power generation plants guarantees a sustainable supply of energy resources for industry and commerce. Additionally, it has also made great efforts to reduce dependence on fossil fuel-based energy. Currently, only 3% of the country’s energy is produced on a bunker basis, with the rest of the energy derived from clean and renewable sources.
Guatemala has 3 special regimes that contain certain fiscal benefits that include temporary exemptions from Income Tax, exemption from other taxes, customs duties and charges applicable to imports through:
- Free Zones Regime
- Maquila System and Export Activity
- Free Industry and Trade Zone (ZOLIC)
Progress in the consolidation of the Central American Customs Union favors the flow of business in the country. The customs union of Guatemala, Honduras, and El Salvador continues to advance. This union represents 75% of the region’s population, with 33 of the 44 million Central Americans, and offers the following features:
- 48.5% of the Regional GDP
- Commercial exchange of more than US$4.466 billion in 2018
- More than 77% of the products are in free circulation with 98% harmonized tariffs
- Implementation of the Central American Single Declaration and Invoice, which reduced the operation time of the process from 11 hours to 5 minutes.