According to the president of the country’s central bank, growth due to foreign investment in Guatemala will increase this year, and these conditions impact the country’s development.
The president of the Bank of Guatemala (Banguat), Álvaro González Ricci, explained the dynamics of macroeconomic growth supported by foreign investment in Guatemala.
The figures increase depending on the investment capacity and the country’s conditions to promote said growth, estimated at USD 1.6 billion (around 12.6 billion Quetzales) for 2024.
Regarding the projections for the close of 2023, according to Banguat, foreign investment in Guatemala closed at 1.5 billion dollars (around Q11.7 billion). The forecast for this year is that this level of foreign investment in Guatemala will increase. According to data from the Central Bank, the figures were adjusted because a company related to maritime transport and another oil company will cease their investments in the country in 2024.
Confidence in foreign investment in Guatemala
In a recent presentation of the global and national economic panorama promoted by the Chamber of Industry of Guatemala, Raúl Bouscayrol, president of the Board of Directors of the institution, emphasized that with the change of government that the country has recently experienced, the certainty of the increase in foreign investment also grew. He communicated that it is estimated that foreign direct investment in Guatemala will surge above USD$1.6 billion dollars.
Bouscayrol pointed out that the confidence index in the economy rose from 43 percentage points to 46% as of October last year. This reflects a high level of confidence expressed by economic actors despite the electoral situation in Guatemala at that time.
“The economic scenario is positive, and we hope that tranquility will soon return to the markets and calm to investors since Guatemala’s location is privileged and an excellent destination for investment,” explained Bouscayrol.
However, the conditions for foreign investment and commercial exchange are accompanied and determined by local investment in infrastructure, public policies to promote industrialization, the establishment of clear investment rules and long-term plans, and generating employment.
Macroeconomic positions
The head of Banguat has insisted that despite the country’s conditions between June 2023 and the second week of 2024, the country risk rating agencies continue to evaluate the Guatemalan macroeconomic environment positively.
He pointed out that these confidence ratings resulting from economic dynamics could increase to the extent that the certainty that the country grants to investors also increases, according to the considerations of the firm Stand & Poors.
On the other hand, the president of Banguat, González Ricci, explained that favorable political events increase investor confidence and strengthen the country’s regulatory framework, resulting in increased foreign investment in Guatemala.
Sectors ready to receive investment
While 2024 has just begun, we can analyze current trends and official reports to provide an informed picture of the prominent economic sectors for foreign investment in Guatemala:
Top Potential Sectors
Information and Communications Technology (ICT): This sector saw a sizable chunk of FDI in 2021 and 2022, and this trend is expected to continue. Data centers, cybersecurity, software development, and telecommunications offer promising opportunities.
Manufacturing: This sector, particularly textiles and apparel, benefits from preferential trade agreements and government incentives. Nearshoring opportunities due to geographic proximity to the US further enhance the appeal.
Financial and Insurance: Guatemala’s growing middle class and rising insurance penetration present substantial investment potential. Fintech startups and specialized insurance products for underserved segments hold promise.
Tourism: Guatemala’s rich cultural heritage and diverse natural beauty make it a prime tourist destination. Investments in sustainable tourism infrastructure, eco-lodges, and adventure activities can be lucrative.
Renewable Energy: Guatemala aims to increase its share of renewable energy, especially solar and hydro. Investing in renewable energy projects aligns with global sustainability goals and offers attractive returns.
Other noteworthy sectors for foreign investment in Guatemala
Construction: Infrastructure development for housing, logistics, and tourism presents steady growth potential.
Agriculture and Agribusiness: Investing in value-added processing and sustainable agricultural practices can unlock significant opportunities.
Healthcare: Guatemala’s healthcare system requires modernization, offering scope for investments in hospitals, clinics, and medical equipment.
Prospects for foreign investment in Guatemala in 2024
Guatemala’s prospects for foreign investment in 2024 shine brightly, fueled by a mix of economic resilience, strategic positioning, and growing international interest. Let’s unpack the data:
Economic Stability: Guatemala boasts a steady GDP growth trajectory, averaging 3.5% annually since 2010, even weathering the pandemic’s storm. This stability, coupled with low inflation and a sustainable debt-to-GDP ratio, paints a picture of a mature and reliable market.
Global Appeal: Guatemala’s strategic location, bordering Mexico and with easy access to the US market, makes it a prime candidate for nearshoring. Coupled with advantageous trade agreements like CAFTA-DR, this proximity unlocks access to a vast consumer base for foreign investors.
Sectorial Dynamism: Key sectors like Information and Communication Technology (ICT) are booming, with FDI soaring in data centers, cybersecurity, and software development. Fueled by Guatemala’s cultural and natural treasures, tourism is poised for further growth, offering ripe opportunities in eco-tourism and sustainable infrastructure.
Investment Climate: The Guatemalan government actively welcomes foreign investment. Initiatives like the “Guatemala Investment Plan 2023-2027” offer tax breaks, streamlined permitting processes, and infrastructure development projects tailored to attracting foreign capital.
International Recognition: The International Monetary Fund (IMF) and World Bank acknowledge Guatemala’s economic resilience and immense potential. Their positive evaluations bolster investor confidence and pave the way for increased foreign participation.
With prudent economic policies, a diversified and growing market, and proactive government support, Guatemala stands ready to embrace foreign investment and propel its economic engine forward.
So, whether you’re a tech giant eyeing ICT expansion, a tourism developer enticed by pristine Mayan ruins, or an energy leader seeking renewable opportunities, Guatemala beckons with open arms and promising horizons. In 2024, the time to invest is now.