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The economic effects of hurricanes ETA and IOTA in Guatemala

Without a doubt, November was a month in which Guatemala, like other Central American countries, were hit by natural events, in this case, hurricanes ETA and IOTA.

The passage of these phenomena seriously affected the country’s economy, since it is estimated that one out of every four agricultural export companies was damaged and at least 5% of those companies affected had a total loss in their plantations. In addition, damage and losses in infrastructure, housing, roads, which generated delays and decreases in the entry and exit of goods to and from Guatemala. This, without leaving behind the fact of human losses, which has no comparison.

At the moment, it has not been possible to quantify the damage, since it is still being evaluated, given the passage of the last tropical depression, IOTA. However, as preliminary data, it was estimated that Q. 20,000.00 was spent. This directly affects the GDP (Gross Domestic Product), since on previous occasions, other depressions have affected up to 4% of the GDP.

The recovery will be slow and gradual, as indicated by the authorities of the Ministry of Agriculture, Livestock and Food, who reported that the recovery may take until the first quarter of 2021. Therefore, the first phase includes the most important actions, such as safeguarding and sanitary protection, for the handling and treatment of dead animals, as well as the food security of all affected families.

Therefore, the second phase of recovery would include the study of soils for their restoration and conservation. The government’s help is vital, since it is obliged to repair public infrastructure to start again the country’s internal and external trade, which is estimated to be replenished until next year.

Elizabeth Flores Barrios
Associate
García & Bodán
Guatemala

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