Guatemala stands as a beacon of economic resilience in Central America, showcasing both its strengths and the hurdles it must overcome to foster a more equitable future. Despite the ongoing struggles with poverty and persistent inequality, there lies a wellspring of potential within this diverse and vibrant nation.
An Economy Poised for Growth
Positioned as the largest economy in Central America by population and economic activity, Guatemala’s gross domestic product was expected to reach US$108.9 million in 2024. Over the past decade, its economy has expanded at an average rate of 3.5%, buoyed by careful fiscal policies and international openness. In 2024, growth accelerated to 3.7%, with a similar rate anticipated in 2025. However, challenges remain, as limited export growth balances the gains from increased credit and remittances.
Tackling Poverty and Inequality
Despite steady economic progress, poverty affects over half of the population, with income disparities especially pronounced among Indigenous Peoples. The forecast for poverty reduction is modest, inching down to 56.6% by 2026 from 57.3% in 2024. Labor informality is a significant issue, encompassing 80% of the workforce, further exacerbating economic inequities and limiting opportunity for sustainable income growth.
Leveraging Natural and Cultural Wealth
Guatemala is rich not only in natural beauty but also in cultural diversity, offering immense possibilities for wealth creation. Yet the challenge remains to translate macroeconomic success into inclusive growth that benefits all sectors of society. President Bernardo Arévalo, in office since 2024, has taken strides toward social and economic reforms targeting infrastructure and antitrust measures, aiming to channel growth toward reducing inequality.
Strategic Support from the World Bank
The World Bank’s engagement with Guatemala through a Country Partnership Framework from 2024 to 2027 aims to bolster human capital, enhance disaster resilience, and expand employment opportunities. With active projects such as the Crecer Sano program and the emission reductions initiative, the Bank supports governmental efforts to construct a more inclusive economy. This framework prioritizes overcoming barriers for women and Indigenous groups, emphasizing the value of diversity as a driver of economic growth.
Achievements and Continued Efforts
Several projects have shown promising results, from strengthening rural economies to enhancing maternal and infant health. Efforts such as the expansion of cash transfers during the COVID-19 pandemic have underscored the role of international cooperation in addressing urgent human needs with targeted interventions.
Guatemala’s journey towards prosperity is a complex tapestry of potential and challenges. As stated in World Bank, with strategic investments and international support, there’s hope for a brighter, more inclusive future for all Guatemalan citizens.
