The recovery started in 2004 was confirmed in 2005. The GDP growth rate was 2.7% in 2004 and 3.2% in 2005. The IMF forecasts a 3.2% graowth rate in 2006.
The growth is mainly due to the public and private expenditures and the expatriate's transfer.
The oil prices increase generate an important inflation rate (9.1% in 2005). Foreign investments are limited by a tense political and social context combined to corruption and drugs problems. 60% of the population live in poverty.
Agriculture represents 22% of the GDP and 75% of the country's exports. Agricultural crops are mainly sugar, banana, coffee and cocoa. Agriculture is submitted to climatic risks such as cyclones. Forests exploitation is little developed. Industry contributes to 19% of the GDP. "Maquiladoras", which are textile or clothing factories established in free zones and having a privileged access to the American market, are developing. Banking sector is weak and tourist sector is in a full swing.
Guatemala is one of Central American Common Market (CACM)'s five countries, with Costa Rica, Salvador, Honduras and Nicaragua. Imports towards this market are consequently submitted to CACM's Common External tariff (CET) customs duties, rated between 0% and 15%. A free trade agreement was signed on the 28th of May 2004 between CACM's five countries and the United States, and came into force. Guatemala's main trade partners are the United States, Salvador, Mexico and Honduras. The country mainly imports hydrocarbons, capital and transport goods and electronic equipment.
