59 Country Report: Data Visualization

Figure 1: Simple Linear Regression for GDP/TB Relationship

Table 1: Raw Data, using 2016-2021 Q4s (measured in Quetzals)

The efficiency and productivity of a country can be holistically measured by the Gross Domestic Product levels, or the total levels of in-home output in terms of quantity and worth. Although Guatemala has the largest economy in Central America, when the GDP is divided into a per capita (per person) basis, it ranks as the 4th poorest country in the North American region with over half of its people below the poverty line. Therefore in a simple theoretical economical sense, if GDP were increased in general, the issue of poverty would also be alleviated incrementally through its direct relationship.

With regards to a relationship, it makes sense to consider the Trade Balance measure since both TB and GDP have to do with internal product flow: GDP is the product produced, while TB is the ratio of product exports to imports. The data (GDP and TB) for the fourth business quarter for years 2016-2021 are shown in Table 1 (top-down). Here, it can be seen that as the levels of imports increased, exceeding the exports, Guatemala’s GDP rose overall. To provide a visualization of this relationship, one can look at Figure 1, the Simple Linear Fitted Line Plot of the Regression Analysis performed between these two variables (with TB being the input and GDP being the response). Summarized, this visualization states that through using this data, predictive GDP (in millions of Quetzals) for future years can be found through 110746mil – 15.22(x) where x is the amount of the trade balance (in millions of Quetzals as well). This linear equation is directly pictured within the visualization, showing the slope – as TB becomes more negative, GDP becomes more positive overall. For an extra statistical insight, the R-squared value can be defined as the goodness-of-fit of this line. With it being 57.3%, we can statistically say that TB accounts for 57.3% of the variation of GDP.

Of course, as stated earlier, this is overly simplified and disregards other important economic/political variables, as well as interactions between such. However, for the scope of just understanding how GDP can be affected in general, this visualization best serves as an easily interpretable starting point for increasing it to raise the standards of living. The question is though, to what extent does this equation hold true? Obviously, one could convincingly argue that there is a point where a negative trade balance has a negative affect on GDP, where the economy becomes too reliant on imports for its own good.

Sources Consulted

EuroMonitor International (2022). Economies and Consumers Quarterly Data (EuroMonitor International) [Data set]. https://www-portal-euromonitor-com.proxy.lib.ohio-state.edu/portal/statisticsevolution/index

World Population Review (2022). Poorest Countries in North America 2022 (World Population Review) [Data set]. https://worldpopulationreview.com/country-rankings/poorest-countries-in-north-america

(Figure 1 and Table 1 personally made in Minitab statistical analysis software)