2023-10-16 13:00:26
From January to June 2023, Guatemala attracted capital of US$743.1 million as foreign direct investment (FDI), which means an increase of US$72 million (10.7%) compared to the same period last year, when the accumulated amount was US$671.1 million according to the central bank.
The indicator is positive in the sense that it improved in the indicated period, but since the election of new authorities, a period of tension and uncertainty has entered, messages that potential investors have captured, and that can change the trend by end the current semester.
The report from the Bank of Guatemala (Banguat) shows that there are five activities that reported the greatest flow of fresh capital and that boosted the numbers in the first semester: manufacturing industry attracted US$200 million; vehicle trade and repair, US$181 million; financial and insurance activities, US$128.6 million; information and communications, US$103.2 million; and other activities, US$65.3 million, which together amount to US$678.1 million, which is equivalent to 91.2% of the total reported.
Transportation and storage activity attracted US$37.6 million; exploitation of mines and quarries, US$21.9 million; agriculture, US$14 million; construction, US$3.2 million; accommodation and food service activities, US$2.1 million, and the only activity that had a negative performance was electricity, water and sanitation supply with US$14.7 million.
The classifier by country of origin indicates that US$254 million were received from Central America and the Dominican Republic; followed by the United States with US$156 million; Mexico, US$138.6 million; Netherlands, US$80.3 million; and Luxembourg, US$58.8 million, which reaches US$687.7 million. Next comes Peru with US$31.3 million; Germany, US$14.1 million; Spain, US$7.2 million; and Sweden, US$2.6 million.
Current context
Given the situation, there is also a reading on the local and foreign investment climate for the following months, after registering several events related to the electoral event and recently, the blockades on highways, streets and avenues to demand the departure of officials from the system. judicial.
Juan Carlos Zapata, executive director of the Foundation for the Development of Guatemala (Fundesa), said that the future situation is extremely worrying since FDI does not go to countries with political crises and this is one of the main ones of the entire democratic era. from the country.
“The damage that this is causing to families and the economy is the stoppages derived from the pandemic because there are no protocols or safe passages to circulate perishables, medicines and food. Daily losses are estimated at more than Q800 million quetzales according to analyst calculations and that is just the beginning. International markets see with great concern that there is no political solution to this crisis that we are going through, with worrying economic implications,” he highlighted.
Zapata also provided a profile of private investment for 2024, and clarified that despite it being too early to know, the conservative estimate today is 1.2%-1.5% of GDP in FDI, but it will depend on whether the blockades are lifted. that are already generating unemployment and lack of income for companies and households.
In his opinion, investment flows are surely on pause until we see how the situation ends and the increase in unemployment is seen with concern, as some 5,300 jobs could be lost, especially in sectors such as tourism, commerce, logistics and direct services that have not been able to operate. This will represent problems for more than 1,300 households that will see their income negatively impacted.
“The misbehaved”
For Hugo Maúl, researcher at the National Economic Research Center), one of the effects will be the image that the country reflects for potential investors and if the movement of the days of demonstrations spreads, the main impact will be on the image that has been wanted to maintain by both the Ministry of Finance and Banguat, in terms of country risk.
In this regard, he considered that possible large projects that were scheduled will be affected, so “thus, fewer investors will look to Guatemala.”
In addition, work will have to be done to regain the country’s credibility, “since in terms of macroeconomic stability we have always been the well-behaved child, but in terms of political stability, we are the badly behaved ones of the group and now we are confirming that we are unreliable.” ”. In addition, the researcher warned that we will have to wait for possible international sanctions.
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