Guatemala

Guatemala is a country of deep contrasts, with a rich cultural heritage and geographic diversity, but also marked by persistent social and economic inequalities. The majority of the population lives in rural areas and works in the informal sector, while a smaller urban population enjoys better living conditions and access to services. These disparities reflect a long-standing inequality and limited state capacity to deliver quality public services, which hinders progress toward more inclusive and sustainable growth.

Although in recent years the country has made progress in social and economic matters, Guatemala continues to face serious structural challenges, such as chronic child malnutrition, low coverage and quality in education, and insufficient access to health services. The economy remains constrained by low productivity, high informality, and dependence on agriculture and low value-added sectors. Employment is predominantly informal, with limited opportunities for social mobility or access to protection. Women, youth, and Indigenous peoples face additional barriers to fully participating in the labor market, and gender disparities in employment and social outcomes remain significant.

Guatemala is also highly vulnerable to disasters and environmental challenges, such as earthquakes, hurricanes, and frequent droughts, which disproportionately affect the poorest communities. Environmental degradation, including deforestation and soil erosion, worsens rural poverty and food insecurity.

By addressing these challenges, Guatemala can reduce inequality gaps. This will require investing in human capital, expanding the coverage and quality of public services, promoting a more dynamic and inclusive private sector, and strengthening resilience to climate and external shocks.

Last Updated: Apr, 2025

Read More

Read Less

Guatemala is the largest economy in Central America. Over 2004 to 2024, growth averaged 3.6 percent per year, supported by prudent macroeconomic policies and an expanding labor force. Growth accelerated to 4.3 percent in 2025 as increased remittance inflows supported private consumption. Over the medium term, growth is expected to stabilize at around 3.7–3.8 percent, in line with a gradual moderation in remittances. The country continues to maintain low levels of public debt and a manageable fiscal deficit, reflecting strong macroeconomic fundamentals.

Despite this progress, important social challenges remain. In 2023, 47.3 percent of the population lived on less than US$8.30 per day (2021 PPP), highlighting the need to continue expanding economic opportunities. In addition, chronic child malnutrition continues to affect 46 percent of children under the age of five, according to 2024 data.

The labor market presents opportunities for improvement, particularly in terms of job quality, in a context marked by high informality and the prevalence of low-productivity jobs with limited access to social protection. Gender gaps also remain significant, with labor force participation at 84.9 percent for men compared to 48.5 percent for women in 2025.

Therefore, strengthening human capital through improved education, health, and public services is a priority. Closing the large infrastructure gap, enhancing resilience to natural disasters, and advancing reforms to improve the business environment are also key to accelerating growth and job creation.

Last Updated: Apr, 2026

Read More

Read Less

The World Bank Group’s strategy in Guatemala seeks to strengthen human capital, improve disaster resilience, and expand employment opportunities, with a focus on institutional capacity and inclusion. Key priorities include improving child nutrition and development, expanding social protection, and increasing access to health, water, and sanitation services. The strategy also promotes disaster risk management, natural capital preservation, and infrastructure development to better address environmental challenges, alongside fostering investment and employment.

As of March 2026, the Bank’s portfolio includes six operations totaling US$1.075 billion. This comprises three investment projects—Crecer Sano, Rural Infrastructure and Mobility, and Smart Public Finance—as well as a CAT DDO operation in the form of a Development Policy Loan. The portfolio is complemented by two trust fund–financed operations: the Emissions Reduction Program and the Dedicated Grant Mechanism for Indigenous Peoples and Local Communities.

IFC’s portfolio in Guatemala reached a record performance in 2025–2026, becoming the largest in Central America, with a total exposure of US$3.20 billion, including both own-account resources and mobilized capital. The program is primarily supported by the financial sector, which is increasingly oriented toward supporting the real economy, with a focus on financing MSMEs, affordable housing, and strengthening value chains, especially in agribusiness. In recent years, IFC has also expanded its presence in infrastructure, supporting investments in essential services such as water and energy.

Among selected results, the Crecer Sano project strengthened primary health care and nutrition, expanded access to safe water and sanitation, and trained health personnel in seven departments. In addition, more than 4,200 midwives were certified as breastfeeding promoters, 359 health posts were equipped, and 90 facilities were built or rehabilitated, improving access to maternal and child health services. These efforts are improving the lives of people living in vulnerable communities and are complemented by broader initiatives to enhance infrastructure and disaster risk management, among others.

Last Updated: Apr, 2026

Read More

Read Less

The Country Partnership Framework (CPF) of the World Bank Group for Guatemala (2024–2027) with an emphasis on strengthening human capital, disaster resilience, and job opportunities, as well as improving institutional capacity and the inclusion of women and Indigenous peoples.

As part of the World Bank Group, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) also support these objectives by facilitating access to financing, promoting public-private partnerships, and reducing investment risks to foster more inclusive and sustainable growth.

You can download the CPF here

Read More

Read Less