Latin American Economic Outlook 2021

Guatemala

1. Socio-economic and perceived impacts of the coronavirus (COVID-19) pandemic

The crisis hit Guatemala’s economy hard. In 2020, gross domestic product (GDP) contracted annually by 1.5%. The economic downturn has increased extreme poverty by more than three percentage points, reaching 18.7% in 2020, while the poverty rate remained relatively stable at 50.9%, based on latest international comparable estimations. Before the crisis, Guatemala’s public expenditures on health stood at 5.8% of GDP, almost unchanged over a decade, compared to the averages of 6.8% in the Latin America and the Caribbean (LAC) region and 8.8% in Organisation for Economic Co-operation and Development (OECD) countries. In 2020, 56.0% of people in Guatemala declared being satisfied with health care, a proportion similar to LAC (48.2%) and much lower than the OECD (70.7%). The pandemic particularly affected education. Between March 2020 and May 2021, schools were fully closed for 33 weeks, compared to 26 weeks in LAC and 15 weeks in the OECD. Both children and families suffered a lot as a result, due to the disruption of education and the increased burden of childcare, especially considering that only 40.7% of the population had Internet access, in 2019.

2. National and international co-operation initiatives aimed to build forward better

The response of the government was aimed to support the most affected households, workers and enterprises throughout the crisis. In May 2020, the government introduced new programmes targeting workers, families and firms hit by the crisis. Among them, Fondo de Protección del Empleo provided a minimum payment of GTQ 75 (Guatemalan quetzal) per day for workers in the formal sector that decided to suspend contracts temporarily. An energy subsidy was introduced to help households cope with the contraction of income. Similarly, the income support measure Bono Familia is targeted through households’ expenditures on energy. Families who consume less than 200 kWh may be candidates for this aid. The new social programme Bono al Comercio Popular was instituted to help the most vulnerable informal workers, enabling them to access a single bonus of GTQ 1 000. To tackle poverty, Programa de Aporte Económico al Adulto Mayor, a fund introduced in 2005, was reinforced. In August 2020, 100 000 people aged 65 or over living in poverty received a monthly subsidy of GTQ 400. Under the new provisions, older people are entitled to social assistance for life. More generally, in response to the COVID-19 pandemic, tax authorities in Guatemala also extended the deadline for filing certain tax returns. For example, the 2019 income tax return and the corresponding monthly value added tax return were postponed. In addition, the tax audit process, information requests and other procedures were suspended until 15 April 2020. For firms, the government instituted Fondo de Crédito de Capital de Trabajo, a fund that grants loans up to a maximum of GTQ 250 000 to companies affected by this crisis, specifically targeting small and medium-sized enterprises.

Guatemala’s international co-operation projects within and beyond the region are aligned to address the short- and long-term challenges linked to the COVID-19 crisis. The Central American Council of Ministers for Social Integration instructed the Central American Social Integration Secretariat to develop an articulated response and prepare a Plan for Recovery: Social Reconstruction and Resilience of Central America and Guatemala. The plan includes strategic projects organised under three areas of intervention: i) social protection, ii) employability and employment; and iii) informal settlements and sustainable urban development. The projects seek to create the conditions for more resilient, socially just and environmentally sustainable societies. The plan is also an example international co-operation can work beyond the LAC region as it was carried out with support from international partners – the EUROsociAL co-operation programme within the European Union, in alliance with specialised United Nations agencies–.

 

	Key indicators – Guatemala1
Socio-environmental	Guatemala		LAC2		OECD3
	2019	2020	2019	2020	2019	2020
Extreme poverty4	15.4	18.7	8.1	10.0	N/A	N/A
	2019	2020	2019	2020	2019	2020
Poverty5	50.5	50.9	26.8	30.9	N/A	N/A
	2009	2014	2009	2019	2009	2018
Gini index6	0.56	0.53	0.50	0.46	0.31	0.31
	Bottom 20%	Top 20%	Bottom 20%	Top 20%	Bottom 20%	Top 20%
Total population in informal households by quintile, 20187	N/A	N/A	78.0	19.1	N/A	N/A
	2010	2017	2010	2017	2010	2017
Health expenditures8	6.1	5.8	6.5	6.8	8.1	8.8
	2010	2017	2010	2017	2010	2017
Out-of-pocket health expenditures9	59.6	54.1	35.6	34.1	20.2	20.6
	03/2020-05/2021
Weeks of full school closure10	33		26		15
	2018
Effective online learning11	N/A		32.5		54.1
	2018
Effective online learning in disadvantaged schools11	N/A		21.5		48.8
	2009	2019	2009	2019	2009	2019
Share of Internet users12	9.3	44.4	29.3	67.8	68.3	85.8
	2015	2018	2015	2018	2015	2018
Number of students per computer13	N/A	N/A	2.4	1.6	1.8	1.1
	2010	2019	2010	2019	2010	2019
Exposure to PM 2.514	29.0	27.8	18.1	18.0	15.7	13.9
	2000-16
% change in intact forest landscape15	-16.0		-8.8		-6.3
Competitiveness and innovation	Guatemala		LAC2		OECD3
	2009	2019	2009	2019	2009	2019
Labour productivity16	21.8	22.2	29.3	26.7	72.2	70.7
	2009	2019	2009	2019	2009	2019
High-tech exports17	4.8	4.9	8.7	8.3	19.5	17.9
	2009	2017	2009	2017	2009	2017
R&D expenditures18	0.1	0.0	0.4	0.4	2.4	2.5
	2009	2016	2009	2017	2009	2017
ICT patents19	1.3	2.0	726	521	173 440	141 358
Citizens’ perceptions and institutions	Guatemala		LAC2		OECD3
	2009	2020	2009	2020	2009	2020
Citizens’ perceptions of corruption in government20	88.1	77.9	72.0	72.4	67.5	58.8
	2009	2018	2009	2018	2009	2018
Citizens’ perceptions of country governed in the interests of few21	75.3	76.6	64.8	82.0	N/A	N/A
	2009	2020	2009	2020	2009	2020
Satisfaction with health care22	66.0	56.0	56.9	48.2	69.2	70.7
	2009	2020	2009	2020	2009	2020
Satisfaction with water quality23	78.8	84.6	74.8	76.0	77.9	79.4
	2010	2016	2010	2016	2010	2016
% of people victim of criminality24	23.3	23.8	19.6	23.8	N/A	N/A
	2021
Rank in the Press Freedom Index25	116		82		36
	2009-18
Change in political polarisation26	25.9		9.6		N/A
	2019
SIGI index27	28.6		25.6		16.3
Fiscal position	Guatemala		LAC2		OECD3
	2009	2019	2009	2019	2009	2019
Total tax revenues28	12.3	13.1	20.6	22.9	31.6	33.8
	2009	2019	2009	2019	2009	2019
Share of VAT in total revenues29	39.5	38.8	25.3	27.7	19.8	20.7
	2009	2018	2009	2018	2009	2018
Social expenditures30	8.1	7.0	11.3	11.4	21.0	19.7

Sources, footnotes and technical details can be found at the end of the country notes.



1. As best as possible, the table follows the key areas identified in Latin American Economic Outlook 2021: i) socio-environmental aspects; ii) economic competitiveness and innovation; iii) citizens’ perceptions and institutions; and iv) fiscal position.

2. Latin America and the Caribbean (LAC) average is a simple average of the largest set of LAC countries for which data are available in the latest year.

3. Organisation for Economic Co-operation and Development (OECD) average is a simple average that includes all OECD member countries as of May 2021.

4. Data refer to the definition of extreme poverty as specified by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC, 2021_[1]), Social Panorama of Latin America 2020. www.cepal.org/sites/default/files/publication/files/46688/S2100149_en.pdf. Data for 2020 refer to an estimate based on 2019 data, as specified in Annex I.A2 of (ECLAC, 2021). Projections are based on 2017 data for Chile, 2014 for Guatemala and 2018 for Mexico. Applying the same criteria as in previous LEO editions, data selection prioritizes comparability across LAC countries and shows the latest comparable data available at the report’s publication date.

5. Data refer to the definition of poverty as specified by (ECLAC, 2021_[1]), Social Panorama of Latin America 2020, www.cepal.org/sites/default/files/publication/files/46688/S2100149_en.pdf. Data for 2020 refer to an estimate based on 2019 data, as specified in Annex I.A2 of ECLAC (2021). Projections are based on 2017 data for Chile, 2014 for Guatemala and 2018 for Mexico. Applying the same criteria as in previous LEO editions, data selection prioritizes comparability across LAC countries and shows the latest comparable data available at the report’s publication date.

6. Data for LAC from ECLAC, CEPALSTAT | Databases and Statistical Publications, https://cepalstat-prod.cepal.org/cepalstat/tabulador/ConsultaIntegrada.asp?idIndicador=3289&idioma=i. Data for Chile refer to 2017, instead of 2019, data for Guatemala refers to 2014.

7. Data for the OECD from OECD Income Distribution Database, www.oecd.org/social/income-distribution-database.htm.

8. Indicator provides the distribution of the total population living in informal households by quintile. An informal household has all of its workers in informal work. Quintiles are based on monthly total household consumption or income. The source of this indicator is the OECD Key Indicators of Informality based on Individuals and their Households database, https://stats.oecd.org/Index.aspx?DataSetCode=KIIBIH_B5.

9. Health expenditures as % of gross domestic product (GDP). Data from OECD (2020), Health at a Glance: Latin America and the Caribbean. Share of current expenditure on health. Data are from OECD (2020), Health at a Glance: Latin America and the Caribbean.

10. Data from UNESCO, https://en.unesco.org/covid19/educationresponse#schoolclosures.

11. Data from OECD et al. (2020), Latin American Economic Outlook 2020, www.oecd.org/publications/latin-american-economic-outlook-20725140.htm.

12. Data from International Telecommunication Union (2020), www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx.

13. Data from OECD et al. (2020), Latin American Economic Outlook 2020, www.oecd.org/publications/latin-american-economic-outlook-20725140.htm.

14. µg/m³. Data refer to population exposure to more than 10 micrograms/m³ and are expressed as annual averages. Data from OECD, https://data.oecd.org/air/air-pollution-exposure.htm.

15. Data from OECD, https://stats.oecd.org/Index.aspx?DataSetCode=INTACT_FOREST_LANDSCAPES.

16. Output per employed person as % of United States 2019 output per person employed. Data from the Conference Board, https://conference-board.org/data/economydatabase/total-economy-database-productivity

17. High-technology exports as % of manufactured exports. Data from The World Bank, https://data.worldbank.org/indicator/TX.VAL.TECH.MF.ZS.

18. Research and development expenditure as % of GDP. Data from The World Bank, https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS.

19. IP5 Patent families. Data from OECD, https://stats.oecd.org/Index.aspx?DataSetCode=PATS_IPC.

20. Percentage of people who think that the government is corrupt. “Is corruption widespread throughout the government in (this country), or not?” Data from Gallup 2021.

21. Percentage of people who think that the country is governed in the interests of few. “En términos generales ¿diría usted que (país) está gobernado por unos cuantos grupos poderosos en su propio beneficio, o que está gobernado para el bien de todo el pueblo?” Data from Latinobarómetro, 2020.

22. Percentage of people who think that the health care is of good quality. “In your city of area where you live, are you satisfied or dissatisfied with the availability of quality health care?” Data from Gallup 2021.

23. Percentage of people who think that the water is of good quality. “In your city or area where you live, are you satisfied or dissatisfied with the quality of water?” Data from Gallup 2021.

24. Percentage of people who are victim of criminality, “have you been a victim of any type of crime in the past 12 months?” Data from Latin American Public Opinion Project, www.vanderbilt.edu/lapop/data-access.php.

25. Data from RFS, Reporters without Borders, https://rsf.org/en/ranking_table.

26. Percentage of people who declare being left or right on a 1-10 scale (1=left, 10 = right). “In politics, it is normal to refer to left and right. On a scale where 0 is the left and 10 is the right, where would you place yourself?” Data from Latinobarómetro, 2020.

27. Data from OECD, www.genderindex.org/ranking/.

28. Revenues as % of GDP. Data from OECD et al. (2021), Revenue Statistics in Latin America and the Caribbean (2021).

29. Value added taxes as % of total revenues. Data from OECD et al. (2021), Revenue Statistics in Latin America and the Caribbean (2021).

30. Social protection expenditures as % of GDP. Data from OECD and ECLAC.

References

Conference Board (2015), The Conference Board’s Alternative China GDP, http://www.conference-board.org//retrievefile.cfm?filename=FAQ-for-China-GDP_9nov1511.pdf&type=subsite.

ECLAC (2020), Social Panorama of Latin America, United Nations Publication, http://www.cepal.org/sites/default/files/publication/files/46688/S2100149_en.pdf.

Eurosocial (2021), The roadmap for EU Cooperation on social cohesion, https://eurosocial.eu/en/.

Gallup (2021), Gallup World Poll (database), www.gallup.com/analytics/232838/world-poll.aspx.

ITU (2020), World Telecommunication/ICT Indicators Database 2020, https://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx.

Latinobarómetro (2020), Vanderbilt (database), Latin American Public Opinion Project, http://www.vanderbilt.edu/lapop/data-access.php.

OECD (2021), OECD.Stat (database), Social and Economical Indicators, https://stats.oecd.org/Index.aspx.

OECD et al. (2020), Latin American Economic Outlook 2020: Digital Transformation for Building Back Better, OECD Publishing, https://doi.org/10.1787/e6e864fb-en.

OECD/The World Bank (2020), Health at a Glance: Latin America and the Caribbean 2020, OECD Publishing, https://doi.org/10.1787/6089164f-en.

Reporters without Borders (2021), World Press Freedom Index (database), https://rsf.org/en/ranking_table.

SIGI (2019), OECD.Stat (database), Social Institutions & Gender Index (SIGI), http://www.genderindex.org/ranking/.

UNESCO (2020), COVID-19 impact on education school closure, https://en.unesco.org/covid19/educationresponse#schoolclosures.

World Bank (2020), “Research and development expenditure (% of GDP)”, https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS.

World Bank (2019), “High-technology exports”, https://data.worldbank.org/indicator/TX.VAL.TECH.MF.ZS.