Guatemala is the largest economy in Central America. Therefore, taking a look at the largest industries in Guatemala is worthwhile for those, who are seeking business opportunities in this country.
More than half of Guatemala’s economic activity takes place in four sectors: manufacturing (20%), commerce (18%), private sector (14%), and agriculture (12%). In addition, Guatemala has the 80th largest export economy in the world. Statistics estimate the value of its exported goods at approximately US$ 11.8 billion.
In this article, we will expose some of the largest industries in Guatemala.
The private sector in Guatemala
The private sector is the driving force of the Guatemalan economy. In fact, the private sector is responsible for around 85% of the national GDP. The majority of this sector is active in the following fields: industry, agriculture, and tourism. Being one of Guatemala’s largest industries, this sector is steadily growing and has even taken on some traditionally public services in recent years.
The main input of foreign currency into the country is from private sector capital, through foreign investment, the sale of shares or bonds, short and long term credits, and deposits. These operations increased during 2019 to approximately USD 19,865 million, according to data from the Central Bank of Guatemala.
Regarding Foreign Direct Investment (FDI), the Central Bank of Guatemala registered USD 998.2 million during 2019, out of which 24% came from the United States. In Foreign Exchange, a total of USD 42.16 billion entered the country in 2019.
This increase in the private sector has led to a decrease in government size. Services such as airports, banking institutions, and even public utilities are now managed by private companies. As an example, private investors recently have planned a new highway in Guatemala as a private investment project.
Manufacture and agriculture sectors
The industrial, manufacturing, and agricultural sectors are part of the largest industries in Guatemala. These sectors primarily focus on the production of the following products:
- fruits and vegetables
- processed foods
The most commonly grown crops in Guatemala are coffee, bananas, nutmeg and cane sugar.
The agricultural sector employs approximately 50% of the country’s workforce and produces some of Guatemala’s largest export products. Indeed, the country exports approximately US$ 1.02 billion in bananas annually, which is approximately 8.6% of all exports. Additionally, Guatemala exports raw sugar worth US$ 999 million (8.5% of exports) and coffee worth US$ 753 million (6.4% of exports). These three goods represent the three largest exports leaving Guatemala.
After fresh produce and other foodstuffs, textiles are the third largest export category with a total value of US$ 1.68 billion. Knit sweaters and T-shirts are the most frequently manufactured products within this category. Mineral products followed closely with a total value of US$ 1.18 billion.
Besides that, there is a number of maquiladoras in the manufacturing sector, which are usually the assembly or production of goods for export. Raw materials are often imported from the same country in which the end product is manufactured. Although these types of factories are usually associated with Mexico, they were founded in Guatemala in the second half of the twentieth century and are now primarily owned by South Korean companies.
Service sector in Guatemala
The service sector is another one of the largest industries in Guatemala. It consists of several specific industries, including tourism, healthcare, customer service, financial services, banking, hospitality, communication, and retail. This sector alone makes up over 60% of Guatemala’s economy.
Tourism is one of the most influential industries in the service sector, generating $ 1.8 billion in 2008. Guatemala is a popular stop for cruise ships, and the country receives an average of two million tourists annually. Visitors explore Guatemala’s beaches and pre-Hispanic ruins.
As previously mentioned, one of the largest industries in Guatemala makes up the import industry. The country imports more products than it exports with an annual value of approximately US$ 17.4 billion. Although the country imports goods from a number of other nations around the world, its largest import partners are:
- United States (US$ 6.42 billion)
- Mexico (US$ 2.01 billion)
- China (US$ 1.92 billion)
- El Salvador (US$ 784 million)
- Panama (US$ 591 million)
The largest category of imported products imported to Guatemala is the technology that cost the country US$ 3.08 billion annually. The main imported goods within this category are transmission equipment (US$ 422 million), computers (US$ 212 million) and telephones (US$ 130 million).
The second-largest import category consists of chemical products. Within this category, the main imported goods are: packaged drugs (US$ 529 million), fragrant mixtures (US$ 157 million), and pesticides (US$ 138 million).
Mineral products are the third-largest category of imports and include refined petroleum (US$ 1.89 billion), petroleum gas (US$ 219 million) and coal briquettes (US$ 69 million).
Get support from Biz Latin Hub when engaging in the largest industries of Guatemala
The unreserved market in Guatemala offers plenty of opportunities for doing business. The country’s strategic location, its natural resources, and its distinctive dedication to entrepreneurship encourage companies to consider business operations in this country.
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