Industry Overview and Business Conditions

The main industries in Guatemala include coffee production, textiles, paper industry, petroleum, pharmaceutical products, rubber products, and tourism.

Agricultural Sector

The agricultural sector accounts for 9.4% of GDP and 31% of employment. In addition to coffee, it also includes sugar, bananas, cotton, rubber, cardamom and various precious woods and fruits.

Industrial Sector

The industrial sector accounts for 21.9% of GDP and 18% of employment. The four main activities: manufacturing, commerce, private service and agriculture.

Service Industry

The service industry accounts for the largest proportion of GDP (62.7%) and 50% employment. Major industries include tourism, healthcare, customer service, financial services, banking institutions, hotels, communications and retail.
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Sugar Industry
According to the Sugar Industry Association in Guatemala (Asociación de Azucareros de Guatemala, Asazgua), Guatemala is currently the No. 1 exporter of sucrose in Latin America and the Caribbean. The country’s sugarcane planting spreads over 250,000 hectares. Due to the use of technology, multi-variety planting, effective irrigation and fertilizers, and overall treatment of diseases and insects, the sugar industry is the largest in Central America. At present, there are 14 main sucrose factories, which create 60,000 jobs and 350,000 part-time jobs every year during the harvest season.
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Tourism
According to statistics from the Guatemala Tourism Agency, Guatemala’s tourist arrivals reached 2.5 million in 2019, a 6% increase from 2018 and higher than the average of Central America. Tourism is one of the most important industries in the country. It brings in billions of dollars in revenue every year by providing many types of tourism, such as nature, sports, volunteering, Spanish learning, food, health, birdwatching and adventure etc. In recent years, the average daily cost of visitors to Guatemala was about US$117.4 per person. The most visited months were the Easter and Christmas holidays in April and December.
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Coffee
Guatemala is one of the top 10 coffee exporting countries in the world. It has 8 major coffee producing areas, all located on the highland in subtropical climate. Stable rainfall and volcanic ashes make coffee beans from each plantation unique, with excellent sourness and fruit flavour. The Guatemalan coffee owns one of the world's best quality, and best suits single-origin drinking. It seldom gets coffee rust, holds low price internationally with high planting costs. There are 125,000 coffee farmers in the country 90% of which are in small and medium-scale. The Guatemalan Coffee Association (Anacafe) has been promoting the organic coffee certification system for 15 years, which contributes to approximately 42,000 small farmers engaged in organic coffee and 22,000 fairtrade farmers in the industry. There are 6,703 coffee estates nationwide, creating 467,000 direct and indirect jobs.
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Seafood
Surrounded by mountains, Guatemala is rich in aquatic resources due to its geographical advantage of being adjacent to the Caribbean Sea and the Pacific Ocean on both sides. Its sophisticated fish and shrimp breeding and processing technology have greatly promoted local aquatic products into the international market. Among them, white shrimp is the most favorite item in various countries. According to the import and export statistics of the Trade Bureau of Ministry of Economic Affairs of ROC, white shrimp imports are among the top-5, showing Taiwanese's fondness of white shrimps from Guatemala.
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Textile
Guatemala’s textile and garment exports are the biggest source of foreign exchange income, accounting for 2.5% of its GDP and creating 180,000 jobs. The government provides fiscal and tax exemptions for the textile and garment industry, which makes the industry competitive among other Central American countries and secures investors' confidence. In addition, the US withdrawal from TPP lowers the threat from Vietnam, the competitor of textile and garment exports to the US. In recent years, the Guatemala's textile and garments have become more sophisticated and more high value-oriented. Advanced textile technologies such as surplus fabric regeneration and recycled polyester yarn are introduced into Guatemala so as to increase production capacity, reduce costs and develop new businesses.
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Handicrafts and Gifts
The production of handicrafts, art crafts and gifts are mostly produced in rural areas by small workshops or families. However, the production of art products is not the main source of family income. Workers use their spare time to engage in this activity and use handicrafts as additional monthly income. In rural areas of Guatemala, many towns specialize in the production of specific handicrafts. For example, towns such as Momostenango, San Cristóbal Totonicapán, Nahualá and Salcajá have high textile production. Quetzaltenango, Totonicapan and Solola are well-known production areas for handicrafts. Then the Cobain and Rabinal regions are famous for their clothing, jewellery, pottery and basket weaving accessories.
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Food Industry
Food industry such as edible oil, seasoning sauce, cereal products, canned food are potential products. Among them, edible oil exports have grown year by year. In 2019, the export value of edible oil was US$488 million, making it the sixth-largest export product in the country. The export value of beverage industry in 2019 was US$337 million with an increase of 3.6%. Moreover, Guatemala’s agricultural exports are becoming increasingly diversified. It produces macadamia nuts, cashew nuts, peanuts and sesame, which meets the trend of having healthy snacks in Taiwan. Having growing and promising business opportunities with Taiwan, Guatemala is the fourth-largest importer of macadamia nuts to Taiwan.

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Important Economic and Trade Policies

The President of Guatemala, Alejandro Giammattei, took office on January 14th, 2020, and launched the “National Development and Innovation Plan” (Plan Nacional De Innovación Y Desarrollo). The 5 parts of the plan are as follows:

Economy, Competitiveness and Prosperity

The plan includes creating job opportunities, increasing the economic growth rate to 6%, promoting investment and exports, increasing the number of tourists to 3 million, and increasing the national tax burden rate by 5% (currently 10%).

Enhanced Transparency

Promote governmental transparency to reduce corruption, decentralization of the central government and cooperation with local governments, effective use of budgets, and improvement of bidding systems.

Social Development

Establish a social protection network that includes education, medical care, nutrition, and housing, as well as a subsidy program for the low-income families. The program is supposed to reduce the poverty rate by 10%.

Improved Governance and Social Security

The program is aimed at improving security and judicial systems, building new prisons, and reorganizing national civilian police units.

Connection with the World

Promote diplomatic ties with Taiwan, and set up more consulates in the United States and Mexico to serve the immigrants from Guatemala.

National Competitiveness Policy 2018-2032

11 Key Industries

Forestry

Fruits and Vegetables

Textile

Manufactured Food

Beverage

Light Industry

Metal Machinery

Construction

Transportation and Logistics

Tourism and Health Services

Communication Software and Call Centers

Delivery and Shipping Methods

Direct Delivery to the Pacific and the Atlantic Coast

The distance between two coasts is 402 kilometers.

Transportation and Connectivity Capability

2 international airports, 9 domestic airports, 22 business airlines and 11 cargo airlines

Second-largest Shipping Transaction Country in Central America

Guatemala is the second-largest shipping transaction country in Central America (17.89%), with three ports in Santo Tomás de Castilla, Puerto Barrios by the Atlantic Ocean, and Puerto Quetzal by the Pacific Ocean.

Highest Independent Power Capacity in Central America

Its annual power generation is 4,073.8 million watts, surpassing Costa Rica (3.529.9 million watts) and Panama (3.336.1 million watts). Moreover, Guatemala’s electricity bill has a competitive price at $55.20/million watts in average for the past three years.

Human Resources

Working-age Population: 11,735,646

Economically-Active Population: 7,145,191

28% of the working-age population is between 15 and 24 years old, and the remaining 72% are over 25 years old (inclusive)

'fDi Magazine' in Financial Times 2019-2020 described "Future American Cities''

Ranked according to cost-effectiveness:

  • No.1 in average annual income of unskilled workers
  • No.4 in the annual average income of skilled and semi-skilled workers