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: Oct 6, 2025

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Guatemala is the largest economy in Central America in terms of population and economic activity. Over the past two decades, the country has maintained an average annual growth rate of 3.5%, supported by prudent fiscal and monetary policies and an open economy. Growth is expected to accelerate to 3.9 percent in 2025, driven by remittances, from 3.7 percent in 2024. The fiscal deficit and debt are projected to increase slightly but will remain at prudent levels.

Despite these economic advances, Guatemala faces significant challenges in reducing poverty and in bridging socioeconomic and inequalities. The country is one of the poorest countries in Latin America and only marginal reductions are expected in the next few years: poverty, measured at the share of the population living under US$8.30 per day (2021 PPPs), is expected to decrease slightly from 47.3 percent in 2023 to 46.1% in 2025.

Similarly, although the country has made efforts to improve the quality of employment, it continues to face challenges in generating more and better jobs. In 2024, 68 percent of the population worked in the informal sector, while female participation in the labor market was only 42 percent. Addressing these challenges and continuing to strengthen the quality of human capital through improved education, health, and social protection services is key to promoting Guatemala’s long-term growth, especially considering the current context and changes in the factors influencing migration.

Guatemala is strengthening its resilience to disasters and climate risks, which is essential to protect the most vulnerable and promote human capital development. Challenges to economic growth persist, making it crucial to advance reforms that improve the business climate, mobilize revenues, and expand social spending, with the goal of generating better jobs and reducing poverty.

Last Updated: Oct 6, 2025

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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 September 2025, the Bank has a portfolio of six operations totaling US$1,037 million. This includes three investment projects—Crecer Sano, Rural Infrastructure and Mobility, and Smart Public Finances—as well as a DPL CAT DDO operation. The portfolio is complemented by two trust-funded operations: the Emissions Reduction Program and the Dedicated Grant Mechanism for Indigenous Peoples and Local Communities. IFC’s portfolio in Guatemala amounts to USD 875 million, distributed across six projects aimed at supporting SMEs, promoting trade finance, and backing infrastructure works.

Cross-cutting themes include strengthening institutional capacity—such as improving data and transparency—and promoting inclusion by addressing barriers faced by women and Indigenous peoples.

As an example of results, the Crecer Sano project has 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 improve the lives of people living in vulnerable communities and are complemented by broader initiatives to improve infrastructure and disaster risk management, among others.

Last Updated: Oct 6, 2025

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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

Last Updated: Oct 6, 2025

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