Public Investment Efficiency, Growth and Debt Sustainability in Guatemala
Selected Issues Papers, September 25, 2025
Source details
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- Public Investment Efficiency, Growth and Debt Sustainability in Guatemala
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Bibliographic details
- Authors: Andrea Paloschi
- Published: September 25, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229025805.018
Executive summary
- Author: Andrea Paloschi
- Publication date: September 25, 2025
- Series: Selected Issues Paper No. 2025/129
- Pages: 12
- Issue: 129
- Volume: 2025
- DOI: https://doi.org/10.5089/9798229025805.018
- Stock No: SIPEA2025129
- ISBN: 9798229025805
- ISSN: 2958-7875
Main findings
- Guatemala has limited levels of public investment efficiency (PIE) that constrain infrastructure and social investment.
- Improving PIE leads to beneficial macroeconomic effects across real, fiscal, and external indicators.
- Higher PIE would allow Guatemala to sustain:
- higher levels of external debt,
- weaker fiscal balances,
- weaker current account balances,
without worsening sovereign risk premia.
- The aggregate effect of higher PIE amplifies welfare benefits for households through higher private consumption.
Analytical focus and methodology (as described)
- The Selected Issues Paper (SIP) analyzes the effects of improving PIE on key real, fiscal, and external macroeconomic indicators.
- The analysis links public investment efficiency to debt sustainability and sovereign risk premia outcomes.
Policy implications and recommendations
- Strengthening public investment efficiency is a policy priority to:
- enhance infrastructure and social investment outcomes,
- increase room for external borrowing without adverse effects on sovereign risk premia,
- permit temporarily weaker fiscal and current account balances while supporting growth,
- boost household welfare via higher private consumption.
Subject and keywords
- Subject: Consumption, Debt sustainability, Expenditure, External debt, National accounts, Public debt, Public investment spending
- Keywords: Consumption, Debt sustainability, debt to GDP, GDP gain, PIE increment, Public Debt, Public Investment Efficiency, Public investment spending, social investment, Sovereign Risk, Western Hemisphere department
Source: Public Investment Efficiency, Growth and Debt Sustainability in Guatemala, Selected Issues Paper No. 2025/129, Andrea Paloschi, September 25, 2025.
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- Public Investment Efficiency, Growth and Debt Sustainability in Guatemala