Political Information

Source: Economic Intelligence Unit

Political and Economic Stability

With a GDP growth rate of 3.0% since 2012, and a significant 5.1% in 2015 and 4.3% in 2016, Guatemala has built a very safe macroeconomics environment. The country is therefore the strongest economy performer in Latin America, and is ranked the 85^thlargest export economy in the world. However, despite being the biggest Central American economy, Guatemala has the highest inequality rates. In spite of the fact that the country is stabilizing its economy, the percentage of poverty is still increasing and social inequality remains a major problem in Guatemala. Poverty is particularly widespread in the rural areas and among indigenous communities, such as the region of Quetzaltenango. Illiteracy, infant mortality and malnutrition are among the highest in the region, life expectancy is among the lowest and, like many of its neighbours, organised crime and violent street gangs are prevalent in Guatemala.

The country is a major corridor for smuggling drugs from South America to the United States. Nonetheless, Guatemala’s success in improving economic conditions has led the shift of focus to be placed on long-term problems, such as poverty. Associations such as the International Development Association (IDA) have been helping to reach these goals.

The government, characterized as “pro-business,” has been implementing conservative economic policies, which has helped maintain low public debt. It is also promising to crack down on crime, reform tax collection, increase transparency, and improve social programs. Guatemala is a signatory to the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) which has encouraged investment and diversification of exports since entering into force in 2006.

Business Climate

The World Bank’s annual Doing Business report ranks economies from 1 to 190 (with 1 being the best) on their ease of doing business. In the 2017 report, Guatemala ranked 63 overall for the ease of doing business and 78 for trading across borders, which measures the ease with which a standardized shipment of goods can be imported or exported across its borders. The average time to ship goods out of Guatemala was 36 hours, with an estimated cost of $CAD 1,777 per 20-foot container. To complete the export process, nine forms of documentation are required. These include a bill of lading, a certificate of origin, a commercial invoice, a customs export declaration, an export license, an inspection report, a packing list, a technical standard/health certificate and a Phytosanitary certificate.

Although there are many reputable exporters in Guatemala, Canadian importers should be aware that corruption could be an issue when doing business in the country. Guatemala ranked 136 out of 176 in Transparency International’s 2016 Corruption Perceptions Index where 1^st place indicates least corrupt.  Canadian companies are advised to exercise strict due diligence before working with a company from Guatemala to ensure that it is a bona fide and reputable entity. It is suggested that Canadian importers commission a report by a credit information provider to verify the financial strength of the partner.

TFO Canada Export Offers

TFO Canada provides an information service for Canadian importers interested in sourcing products from developing and emerging economies such as Guatemala. This includes practical advice on sourcing from developing country exporters, a customized news bulletin including new leads from Guatemala as they come in, and a searchable database for sourcing new products and suppliers. The chart below provides an approximate number of supplier profiles from Guatemala, available online with contact information through TFO Canada’s searchable Supplier Database.