1. CURRENCY

The official cunrency is the Quetzal. The average exchange rate in 1999 ranges between Q7.65 and Q7.88 per US $1.00.

Currency can be freely exchanged in the bank system or at "La Aurora" Interna[ tional Airport.

2. ECONOMIC ACTIVITIES

In 1999, Guatemala's Gross Domestic Product (GDP) showed a true growth of 3.5%.

The country's economic activities rest on eleven economic sectors, of which. trade, agriculture and industry are determining in the conformation of the GDP, as they contribute to more of 60% of it.

The Economically active population -EAP- which in Guatemala is made up by people aged ten and over was estimated at about 3.6 millions in 1997, divided as follows: 82.5% men and 17.5% women. The sectorial composition of the PEA in 1997 was 58% agricultural, 17.7% industry and construction, 12% services and 12.3% in other areas. The country's economy has experienced a satisfactory evolution during the last years.

The period between the years 1950 and 1978 was distinguished by being of relative stability. The growth of the GDP reached a cumulative yearly rate of 5% and the real income per inhabitant went from US$217 to US$360 per year. During these years the parity of the Quetzal against the dollar remained stable

The period of crisis from 1979 to 1985, is remembered for the marked instability of prices and exchange rate. The critical signs deepened in 1985, when the PIB registed a contraction of 3.5%, reversing the historical positive trend. The results were evident in the increase of unemployment, the reduction of per captial income and galloping price increase as a consequence of inflation. Such behavior of the economy was very related to the international situation, since the world economic recession and the Central American Common Market had an incidence in the weakening of exports, with the subsequent effects in the balance of payments and international reserves. Also, the resurgence of armed conflicts as a result of political and social tensions of the area encouraged the loss of capital, reducing investment.

The period back to stability and search of economical reactivation, extended from the end of 1985 to 1995. With the political support due to the democratic process experienced by the country, which changes the goverment scheme since 1986, Guatemala begins a stage of economic stability, framed in the correction of macroeconomic and financial unbalaces. A sustained growth of GDP from 0.1 % in 1986 to a rate of about 3.5% was achieved for the remaining years of this period.

During this stage, a number of exchange, hscal and monetary, price and foreign debt management measures were introduced, which rapidly offered results by stopping the GDP fall, decreasing inflation and reducing the balance of the foreign debt.

Also, when it found itself in a globalized economy contour, Guatemala begins a process of structural adjustment which pretends to modernize the economy, for which the structural adjustment program is based on four basic pillars: stabilization, trade liberation, deregulation and public administration modernization.

38 avenida 4-41 zona 7 colonia La Floresta, Guatemala Centro America 01007
Phone: (502) 5933374 fax: (502) 5955835
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