The monthly index of economic activity (Imae) and the confidence index of economic activity (Icae) of the private sector are the two indicators that improved their evolution in January and February recently, following months registering minimal increases or decreasing behavior .
The Imae, whose function is to measure the real performance of the economy in the short term, stood at 4.4%, higher than the 2.9% in December and 3.2% in January 2023, as reported by the Bank of Guatemala (Banguat) following technical validations.
The report indicates that in January, this result was influenced above all by the positive performance of six productive activities: vehicle trade and repair; financial and insurance activities; Real estate activities; construction; manufacturing industries; and, administrative and support services activities.
According to the evaluation report of the Monetary, Exchange and Credit Policy 2023 and the 2024 Outlook, the economy measured by gross domestic product (GDP) closed at 3.5%, but it will be in April when the closing figures are confirmed. The document states that the growth forecast for 2024 is between 2.5% and 4.5% with a central value of 3.5%.
Improve confidence
Regarding the Icae, whose objective is to measure the perception of confidence of economic agents in the business and investment climate, the report indicates that in February it was 71.67 points, 24% higher than that registered in January (57.80) and at 37.43% compared to that registered in February 2023 (52.15 points).
The reading of the indicator is that when it exceeds 50 points, it indicates that there is an improvement in the confidence of the decision makers in the economy; but when it is lower, it reflects a level of indecision that can influence investment plans.
In the economic expectations survey (EEE) to the panel of private analysts, the question is asked: How do you think the business climate will evolve for productive activities in the private sector in the next six months compared to the past six months? which 68.8% considered will improve and 31.2% thought it will remain the same.
“There is greater peace with the inauguration of the new government, since at some point there was a lot of speculation regarding what might happen to President Bernardo Arévalo”
Alejandro Ceballos, Vestex vice president
The sample adds that 68.8% currently say the country’s economy is better than a year ago and 31.2% consider it not. Furthermore, 56.3% stated that they are not sure of the current situation for companies to make investments, 37.5% say that it is a good time and 6.2% affirm the opposite.
Interpretation
When consulted Alejandro Ceballos, vice president of the Clothing and Textiles Commission (Vestex) attached to the Guatemalan Association of Exporters (Agexport), stated that there was greater tranquility with the inauguration of the new government, since at some point there was a lot of speculation regarding what What might happen with President Bernardo Arévalo, and that is what is reflected in the Imae and the Icae.
“There is optimism for the new government, which has the support of all sectors so that things go well as they should, because the good of the country is everyone’s good,” he said.
He clarified that, in the case of his sector, exports have not rebounded, since an electoral process is entering into the United States market, which implies uncertainty, apart from the fact that the government would be expected to “make the inflation control.
It is also beginning to affect the situation of the international logistics chain due to what is happening in the Panama Canal (strong drought and restriction of the passage of ships), which is raising the costs of products. But, on the other hand, the Nicaraguan market is beginning to recover, where Guatemalan plants ship textile products, and forecasts point to closing the fiscal year with export growth of 9%.
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