{
  "title": "Guatemala: Staff Concluding Statement of the 2025 Article IV Mission",
  "publication": "IMF News, June 23, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/06/23/guatemala-staff-concluding-statement-of-the-2025-article-iv-mission",
  "canonical": "https://www.imf.org/en/news/articles/2025/06/23/guatemala-staff-concluding-statement-of-the-2025-article-iv-mission",
  "overlayPath": "/en/news/articles/2025/06/23/guatemala-staff-concluding-statement-of-the-2025-article-iv-mission/index.md",
  "summary": "An International Monetary Fund (IMF) mission led by Mr. Alexander Culiuc visited Guatemala City during June 10-20, 2025 for the 2025 Article IV consultation. At the end of the visit, the mission issued the following statement",
  "publishDate": "2025-06-23",
  "sections": [
    {
      "heading": "Mission summary",
      "content": "- An IMF mission led by Mr. Alexander Culiuc visited Guatemala City during June 10-20, 2025 for the 2025 Article IV consultation.\n- Key assessment: prudent macroeconomic management has supported Guatemala’s resilience, delivering low inflation, robust policy buffers and a sustained current account surplus.\n- Policy thrust: accelerate reform implementation and enhance policy coordination to achieve stronger, more inclusive growth and poverty reduction."
    },
    {
      "heading": "Recent economic developments, outlook, and risks",
      "content": "- Growth and inflation\n  - Real GDP grew by 3.7 percent in 2024.\n  - Headline inflation fell to 1.7 percent in May 2025; core inflation remains near 4 percent.\n  - Growth projected at 3¾ percent in 2025; beyond 2025 growth projected to slightly exceed 3½ percent.\n- External sector and buffers\n  - Current account surplus narrowed to 2.9 percent of GDP in 2024.\n  - Remittances stabilized at 19 percent of GDP.\n  - International reserves reached US$27.1 billion.\n  - Public debt remains low—under 27 percent of GDP—and Guatemala is now only one notch below investment grade.\n- Monetary policy setting\n  - Banguat kept its policy rate unchanged at 4.5 percent since the 25bps cut in November 2024.\n- Fiscal developments\n  - August 2024 supplementary budget prioritized infrastructure and social spending; targeted deficit of 2.7 percent of GDP; realized deficit was 1 percent of GDP.\n  - The 2025 budget is expansionary; original deficit target 3.2 percent of GDP; a supplementary budget raised the deficit to 3.8 percent of GDP.\n- Risks\n  - Balance of risks tilted to the downside: domestic political tensions could impede legislative progress; intensified/protracted global trade disputes could dampen investment.\n  - Specific external risk: proposed 3.5 percent excise tax on remittances in U.S. policy discussions could disrupt remittance-supported consumption.\n  - Upside: lower net emigration could boost domestic employment if matched by efforts to expand formal private-sector jobs."
    },
    {
      "heading": "Fiscal policy (findings and recommendations)",
      "content": "- Short-term assessment\n  - The 2025 expansionary fiscal stance is appropriate to cushion expected softening in private demand.\n  - Execution constraints may limit capital spending; projected deficit around 2½ percent of GDP, below the revised budget of 3.8 percent.\n  - Transfers to Departmental Development Councils (CODEDEs) are historically high at 1.3 percent of GDP and require close oversight.\n- Medium-term strategy\n  - Revert deficits toward historical levels (around 2 percent of GDP) while preserving infrastructure and social spending.\n  - Strengthen revenue mobilization (continue efforts from the Tax Administration (SAT): mandatory electronic invoicing, enhanced border enforcement, robust audits).\n  - Complement compliance measures with comprehensive tax policy reforms in the medium term.\n  - Improve expenditure quality: systematic expenditure reviews, embed the National Development Plan into annual and multi-year budgets, and a new Public Procurement law to ease capital spending bottlenecks.\n  - Improve targeting in social programs; strengthen the Medium-Term Fiscal Framework and multiannual budget planning with realistic, sector-informed projections.\n- Financing strategy\n  - Emphasize greater reliance on domestic financing under a sound medium term debt management strategy (MTDS) to:\n    - (i) reduce real appreciation pressures,\n    - (ii) help develop the domestic financial market,\n    - (iii) reduce currency risks,\n    - (iv) lower costs of monetary policy operations incurred by Banguat.\n  - Recommendations: consolidate domestic issuances, introduce shorter-maturity instruments, regularly publish the MTDS and annual borrowing plans."
    },
    {
      "heading": "Monetary and exchange policies",
      "content": "- Current stance and transmission\n  - The ex-ante real policy rate is at 1 percent, within the estimated neutral real rate range (1–2 percent).\n  - Given uncertainty from U.S. tariff measures and supply chain risks, maintain current policy stance while waiting for clarity.\n  - Passthrough of policy rate to deposit rates has recently increased; scope to further strengthen monetary transmission by developing financial markets, increasing competition, and reducing reliance on reserve requirements.\n- FX and remittances\n  - Banguat’s FX participation rule balances higher consumption and external competitiveness; the external position is stronger than fundamentals and desirable policies imply, and the current account gap should be closed by raising investment.\n  - Banguat’s sterilization to manage remittance inflows incurs costs; closer coordination with MinFin and greater use of domestic debt to finance the budget could reduce these costs.\n  - Long-term financial strength of Banguat requires consistent enforcement of legal provisions mandating the budget to cover central bank losses."
    },
    {
      "heading": "Financial sector",
      "content": "- System soundness\n  - Banking system remains sound with solid capital and liquidity buffers and strong profitability.\n- Regulatory and supervisory progress\n  - Enhanced credit risk regulations, more robust stress testing, broader regulatory coverage, and voluntary inclusion of savings and credit cooperatives in the Credit Risk Information System.\n- Priorities and reforms\n  - Reinforce efforts by expanding risk-based supervision and strengthening oversight of fintech and digital financial services.\n  - Adopt revisions to the 2002 Law on Banks and Financial Groups, transition to International Financial Reporting Standards, advance the draft Secondary Market Law, approve the e-money law, and continue implementation of financial inclusion strategy elements."
    },
    {
      "heading": "Governance and structural agenda",
      "content": "- Legislative priorities\n  - Revise AML/CFT Law to align with international standards; adopt Beneficial Ownership Law; adopt Public Procurement Law; adopt Law for the Protection of Whistleblowers.\n  - GAFILAT mutual evaluation expected in 2027; delays in the AML/CFT law could complicate progress to investment grade.\n- Institutional and anticorruption measures\n  - Consolidate institutional progress: creation of the National Commission Against Corruption and rollout of probity offices across executive institutions; develop a medium-term anti-corruption strategy.\n- Investment and competitiveness\n  - Accelerate infrastructure investment via amendments to the law on Partnerships for Development of Economic Infrastructure and a new law on ports to close gaps and crowd in private investment.\n  - Continue efforts to formalize the economy and improve the business environment to prepare for lower net emigration impacts on the labor market."
    },
    {
      "heading": "Key statistics and projections (selected)",
      "content": "- Recent levels and balances\n  - Headline inflation: 1.7 percent in May 2025.\n  - Core inflation: near 4 percent.\n  - Remittances: 19 percent of GDP (stabilized).\n  - International reserves: US$27.1 billion.\n  - Public debt: under 27 percent of GDP.\n  - Banguat policy rate: 4.5 percent (unchanged since 25bps cut in November 2024).\n- Fiscal outcomes and budgets\n  - August 2024 supplementary budget targeted deficit: 2.7 percent of GDP; realized deficit: 1 percent of GDP.\n  - 2025 original budget deficit target: 3.2 percent of GDP; supplementary budget raised deficit to 3.8 percent of GDP.\n- Selected items from \"Guatemala: Selected Economic Indicators\" (as presented)\n  - Real GDP: 3.5 (2023), 3.7 (2024), 3.8 (2025), 3.6 (2026)\n  - Inflation (average): 6.2 (2023), 2.9 (2024), 2.4 (2025), 4.0 (2026)\n  - Current Account Balance (percent of GDP): 3.1 (2023), 2.5 (2024), 1.7 (2025), 1.3 (2026), 0.7 (2027), 0.2 (2028)\n  - Trade Balance (goods and services, percent of GDP): -15.1 (2023), -15.5 (2024), -15.9 (2025), -15.8 (2026), -15.4 (2027), -15.0 (2028), -14.7 (2029)\n  - Remittances (percent of GDP): 19.0 (2023), 18.8 (2024), 18.0 (2025), 17.1 (2026), 16.3 (2027), 15.5 (2028)\n  - Financial Account (\"+\" = net lending): 2.7\n  - Total Revenues (percent of GDP): 12.5 (2023), 12.4 (2024)\n  - Tax Revenues (percent of GDP): 11.7 (2023), 11.8 (2024)\n  - Total Expenditure (percent of GDP): 13.7 (2023), 13.4 (2024), 15.0 (2025), 15.1 (2026), 15.3 (2027), 15.2 (2028)\n  - Current Expenditure (percent of GDP): 11.2 (2023), 11.0 (2024), 11.9 (2025), 12.0 (2026)\n  - Capital Expenditure (percent of GDP): 3.2 (2023), 3.4 (2024), 3.3 (2025)\n  - Primary Balance (percent of GDP): 0.4 (2023), -1.0 (2024), -1.1 (2025), -1.2 (2026)\n  - Overall Balance (percent of GDP): -1.3 (2023), -2.6 (2024), -2.8 (2025), -2.9 (2026)\n  - Gross Central Government Debt (percent of GDP): 27.2 (2023), 26.3 (2024), 27.1 (2025), 28.0 (2026), 28.9 (2027), 29.6 (2028), 30.2 (2029)"
    },
    {
      "heading": "Policy priorities (summary recommendations)",
      "content": "- Sustain prudent macroeconomic management while accelerating reform implementation and enhancing policy coordination.\n- Use existing fiscal space in the short term to finance priority infrastructure and social spending, with strong oversight of CODEDEs transfers.\n- Implement medium-term revenue reforms, including comprehensive tax policy reform, and strengthen expenditure efficiency and multi-year budgeting.\n- Adopt a well-calibrated financing strategy emphasizing domestic market development and regular MTDS publication.\n- Maintain current monetary policy stance for now, strengthen monetary transmission, and coordinate with MinFin to manage sterilization costs.\n- Advance financial sector reforms: risk-based supervision, fintech oversight, legal and accounting standards updates, and laws to deepen markets.\n- Prioritize governance and structural reforms: AML/CFT, Beneficial Ownership, Public Procurement, Whistleblower protection, anti-corruption strategy, and laws to accelerate infrastructure investment.\n\nSource: IMF staff concluding statement of the 2025 Article IV mission to Guatemala.\n\n---\n\n\n References\n\n- Guatemala and the IMF\n- IMF Policy Advice -- A Factsheet\n- The IMF and Good Governance -- A Factsheet\n- Mission Concluding Statements\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/06/23/guatemala-staff-concluding-statement-of-the-2025-article-iv-mission"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2025/06/23/guatemala-staff-concluding-statement-of-the-2025-article-iv-mission/index.md)",
    "[Structured JSON version](/en/news/articles/2025/06/23/guatemala-staff-concluding-statement-of-the-2025-article-iv-mission/index.json)",
    "[Bundle manifest](/en/news/articles/2025/06/23/guatemala-staff-concluding-statement-of-the-2025-article-iv-mission/bundle-manifest.json)",
    "Published: June 23, 2025",
    "An IMF mission led by Mr. Alexander Culiuc visited Guatemala City during June 10-20, 2025 for the 2025 Article IV consultation.",
    "Key assessment: prudent macroeconomic management has supported Guatemala’s resilience, delivering low inflation, robust policy buffers and a sustained current account surplus.",
    "Policy thrust: accelerate reform implementation and enhance policy coordination to achieve stronger, more inclusive growth and poverty reduction.",
    "Growth and inflation",
    "External sector and buffers",
    "Monetary policy setting",
    "Fiscal developments",
    "Risks",
    "Short-term assessment",
    "Medium-term strategy",
    "Financing strategy",
    "Current stance and transmission",
    "FX and remittances",
    "System soundness",
    "Regulatory and supervisory progress",
    "Priorities and reforms",
    "Legislative priorities",
    "Institutional and anticorruption measures",
    "Investment and competitiveness",
    "Recent levels and balances",
    "Fiscal outcomes and budgets",
    "Selected items from \"Guatemala: Selected Economic Indicators\" (as presented)",
    "Sustain prudent macroeconomic management while accelerating reform implementation and enhancing policy coordination.",
    "Use existing fiscal space in the short term to finance priority infrastructure and social spending, with strong oversight of CODEDEs transfers.",
    "Implement medium-term revenue reforms, including comprehensive tax policy reform, and strengthen expenditure efficiency and multi-year budgeting.",
    "Adopt a well-calibrated financing strategy emphasizing domestic market development and regular MTDS publication.",
    "Maintain current monetary policy stance for now, strengthen monetary transmission, and coordinate with MinFin to manage sterilization costs.",
    "Advance financial sector reforms: risk-based supervision, fintech oversight, legal and accounting standards updates, and laws to deepen markets.",
    "Prioritize governance and structural reforms: AML/CFT, Beneficial Ownership, Public Procurement, Whistleblower protection, anti-corruption strategy, and laws to accelerate infrastructure investment.",
    "[Guatemala and the IMF](http://www.imf.org/external/country/GTM/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[The IMF and Good Governance -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/the-imf-and-good-governance)",
    "[Mission Concluding Statements](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "alternates": {
    "markdown": "/en/news/articles/2025/06/23/guatemala-staff-concluding-statement-of-the-2025-article-iv-mission/index.md",
    "json": "/en/news/articles/2025/06/23/guatemala-staff-concluding-statement-of-the-2025-article-iv-mission/index.json",
    "bundleManifest": "/en/news/articles/2025/06/23/guatemala-staff-concluding-statement-of-the-2025-article-iv-mission/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-26T03:57:40.723Z"
}