Guatemala - Country Commercial Guide
Market Overview

Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.

Last published date: 2021-08-10

The United States and Guatemala enjoy a growing trade relationship, which became even stronger after implementation of the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). As of January 1, 2015, most U.S. consumer and industrial goods enter CAFTA-DR countries duty free (for goods that meet the country of origin requirements). The United States is Guatemala’s largest trading partner accounting for nearly 40 % of Guatemala’s trade.

In general, CAFTA-DR  has been very successful for all parties. Intra-regional trade among Central American countries and the Dominican Republic increased from $6.3 billion in 2010 to more than $10 billion by 2020. U.S. goods exports to Central America and the Dominican Republic have more than doubled since 2004 (prior to the Agreement taking affect for the first signatories).  Nevertheless, CAFTA-DR  has been unable to solve some of the region’s most serious problems – including physical insecurity and corruption.

U.S. merchandise exports to Guatemala were $6.29 billion in 2020. Leading U.S. exports to Guatemala include mineral fuel oil, machinery, electric machinery, and cereals (corn, wheat, and rice).

Product US Exports in 2020

Mineral fuels, oils, distillation products

$1.67B

Electrical, electronic equipment

$563.09M

Machinery, nuclear reactors, boilers

$520.89M

Vehicles other than railway, tramway

$428.53M

Cereals

$421.96M

Plastics

$357.48M

Paper and paperboard, articles of pulp, paper and board

$252.22M

Residues, wastes of food industry, animal fodder

$228.90M

Meat and edible meat offal

$179.90M

Other made textile articles, sets, worn clothing

$117.40M

Optical, photo, technical, medical apparatus

$108.30M

Animal, vegetable fats and oils, cleavage products

$103.48M

Source: tradingeconomics.com

U.S. imports from Guatemala totaled $3.76 billion in 2020, a slight decrease from 2019. U.S. imports include edible fruits and nuts; knit apparel; coffee, tea, and spices; woven apparel; edible vegetables, roots, and tubers. 

Product US Imports in 2020

Edible fruits, nuts, peel of citrus fruit, melons

$1.17B

Articles of apparel, knit or crocheted

$990.90M

Coffee, tea, mate, and spices

$272.50M

Edible vegetables and certain roots and tubers

$251.46M

Articles of apparel, not knit or crocheted

$137.34M

Sugars and sugar confectionery

$132.95M

Paper and paperboard, articles of pulp, paper and board

$102.34M

Mineral fuels, oils, distillation products

$64.66M

Other made textile articles, sets, worn clothing

$63.13M

Source: tradingeconomics.com

U.S. imports from Guatemala totaled $3.76 billion in 2020, a slight decrease from 2019. U.S. imports include edible fruits and nuts; knit apparel; coffee, tea, and spices; woven apparel; edible vegetables, roots, and tubers.

U.S. products and services enjoy strong brand recognition in Guatemala, and U.S. firms have a good reputation in the Guatemalan marketplace. It is estimated that approximately over 200 U.S. firms have a presence in the market.Due to the Covid-19 pandemic, Guatemalan GDP contracted by 1.5% in 2020, to an estimated of $78.56 billion.

The preliminary data from the Bank of Guatemala (BANGUAT) show that the flow of Foreign Direct Investment (FDI) totaled $15.2 million in 2020 (1.17% of GDP), a 6.1% decline compared to 2019. Industries that attracted most of the FDI flows in 2020 were finance and insurance $272 million; manufacturing industries $219 million; trade and repair of vehicles $162.8 million and supply of electricity, water, and sanitation $144 million. The United States invested a total of $195.3 in 2020 31% less than 2019 due to the pandemic crisis.

A key component to Guatemala’s economy is remittances from migrants, most of whom have settled in the United States. Guatemala closed 2020 with a record amount of remittances of $11,340 million, $832 million higher than in 2019, which represents 7.9% more than the $10,508 million received in 2019.

According to Research and Social Studies Association (ASIES), formal employment was hit hard by the COVID-19 pandemic. Compared to 2019, 60,939 jobs were lost, and 17,400 expected new positions were not generated. In 2020, the percentage of formal job participation was equal to that in 2015.

Low participation in the formal job sector is one of the reasons that Guatemala’s tax revenue is the lowest in the region at 10% of gross domestic product  - which ranks 209th out of 220 countries in terms of revenues. A low tax base combined with a reluctance to take on sovereign debt have resulted in government expenditures also being low. Guatemala’s governmental expenditures are equivalent to only 12% of gross domestic product compared to a regional average of 18%.