{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Guatemala",
  "publication": "IMF News, September 8, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/09/05/pr-25289-guatemala-imf-executive-board-concludes-2025-article-iv-consultation",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Guatemala.",
  "publishDate": "2025-09-08",
  "sections": [
    {
      "heading": "Key messages and overall appraisal",
      "content": "- The Executive Board completed the Article IV Consultation for Guatemala. The authorities have consented to the publication of the Staff Report prepared for this consultation.\n- Guatemala has maintained a resilient economy with low inflation, ample policy buffers, and, for the last few years, a positive current account, contributing to increasingly favorable market access.\n- Reforms are needed to shift the country into a high investment/high growth equilibrium and to meaningfully reduce poverty.\n- The macroeconomic outlook is strong but faces elevated uncertainty from changing trade and migration policies abroad and vulnerability to severe weather events.\n- Next Article IV consultation expected on the standard 12-month cycle."
    },
    {
      "heading": "Macroeconomic outlook and projections",
      "content": "- Economic growth:\n  - Expected to hold at 3.8 percent in 2025.\n  - External headwinds expected to keep growth around 3.5 percent in 2026–27.\n  - In later years, growth could converge to 4 percent owing to infrastructure investments and ongoing reforms.\n- Inflation:\n  - Projected to gradually return to the monetary policy target (4 percent ± 1 percentage point).\n- Fiscal and public debt:\n  - Fiscal deficits of about 3 percent of GDP are expected to persist in the medium term.\n  - Public debt reaching 30 percent of GDP by the end of the projection period.\n- Balance of risks:\n  - Tilted to the downside—domestic constraints on advancing reforms; external trade policy uncertainty; risks to global growth; shifts in migration policy affecting remittance-supported spending; changes in domestic labor market from declining net emigration; vulnerability to severe weather events."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- General assessment:\n  - Directors agreed with the thrust of the staff appraisal and commended authorities’ prudent macroeconomic policies delivering low inflation and robust policy buffers.\n  - Guatemala is resilient and generally well positioned to face external shocks and domestic challenges.\n- Fiscal policy:\n  - 2025 expansionary fiscal stance considered generally appropriate given softening private demand.\n  - Over the medium term, reverting fiscal deficits to historical averages of around 2 percent of GDP warranted.\n  - Essential actions: strengthen revenue mobilization; improve targeting of social programs; improve efficiency of public spending; enhance budget planning and execution; strengthen public financial management.\n  - Encourage increasing reliance on domestic funding anchored in a credible medium-term debt management strategy.\n- Monetary and exchange rate policy:\n  - Current monetary policy stance and Banguat’s response to large remittance inflows—guided by an intervention rule—considered broadly appropriate.\n  - Encourage continued strengthening of monetary policy transmission.\n  - Emphasize improved policy coordination between Banguat and the Ministry of Finance to alleviate sizable sterilization costs.\n  - Support continued efforts to enhance exchange rate flexibility in a well-communicated manner.\n- Financial sector and markets:\n  - Directors acknowledged resilience of the financial system and commended efforts to strengthen banking regulation and supervision.\n  - Encourage expanding risk-based supervision, developing the macroprudential toolkit, and enhancing oversight of fintech and digital financial services.\n  - Priority actions: revise the 2002 Law on Banks and Financial Groups; complete transition to International Financial Reporting Standards; advance the draft Secondary Market Law; approve the e-money law; implement the financial inclusion strategy.\n- Governance and structural reforms:\n  - Critical need to enhance governance and advance structural reforms to foster inclusive growth.\n  - Urged adoption of new laws including an AML/CFT Law, a Beneficial Ownership Law, a Public Procurement Law, and a Law for the Protection of Whistleblowers.\n  - Commended authorities for addressing corruption risks in municipal investment projects administered by Department Development Councils (CODEDEs) but stressed need for stronger oversight and capacity-building for CODEDEs.\n  - Encouraged consolidating institutional gains through a medium-term anti-corruption strategy.\n  - Continued efforts to formalize the economy and improve the business climate emphasized."
    },
    {
      "heading": "Selected economic and social indicators (highlights)",
      "content": "- Social and demographic indicators:\n  - Population 2024 (millions): 17.9\n  - Gini index (2014): 48.3\n  - Percentage of indigenous population (2018): 43.7\n  - Life expectancy at birth (2022): 68.7\n  - Population below the poverty line (Percent, 2023): 55.1\n  - Adult illiteracy rate (2022): 17.0\n  - Rank in UNDP development index (2022; of 189): 136\n  - GDP per capita (US$, 2024): 6,341\n- Selected economic indicators (annual percent change unless otherwise indicated):\n  - Real GDP: 2022: 4.2; 2023: 3.5; 2024: 3.7; 2025: 3.8; 2026: 3.6; 2027: 3.9\n  - Consumer prices (average): 2022: 6.9; 2023: 6.2; 2024: 2.9; 2025: 2.2; 2026: 4.0\n  - Consumer prices (end of period): 2022: 9.2; 2023: 1.7; 2024: 3.2\n  - M2: 2022: 11.1; 2023: 6.8; 2024: 7.8; 2025: 9.3; 2026: 7.9; 2027: 7.4\n  - Credit to the private sector: 2022: 15.8; 2023: 14.9; 2024: 12.3; 2025: 11.0; 2026: 10.5; 2027: 9.7\n- Saving and investment (In percent of GDP):\n  - Gross domestic investment: 2022: 16.6; 2023: 16.5; 2024: 16.7; 2025: 16.8; 2026: 16.9; 2027: 17.1; 2028: 17.3\n  - Gross national saving: 2022: 17.7; 2023: 19.6; 2024: 19.5; 2025: 19.0; 2026: 18.5; 2027: 17.6; 2028: 18.4; 2029: 18.1; 2030: 19.4\n  - External saving: 2022: -1.2; 2023: -3.1; 2024: -2.9; 2025: -2.2; 2026: -1.6; 2027: -1.0; 2028: -0.5\n- External sector:\n  - Current account balance: 2022: 3.1; 2023: 1.0; 2024: 0.5\n  - Trade balance (goods): 2022: -15.0; 2023: -13.8; 2024: -14.0; 2025: -14.2; 2026: -14.1; 2027: -13.6; 2028: -13.3; 2029: -13.0\n  - Exports: 2022: 12.5; 2023: 11.8; 2024: 10.7; 2025: 10.9\n  - Imports: 2022: 29.9; 2023: 26.3; 2024: 25.7; 2025: 25.2; 2026: 24.6; 2027: 24.3; 2028: 24.1; 2029: 24.0; 2030: 23.8\n  - Other (net): 2022: 18.8; 2023: 16.2; 2024: 14.5; of which: remittances: 2022: 15.9\n  - Financial and capital accounts balance (Net lending (+)): 2022: 2.7; 2023: 2.5\n  - of which: FDI (net): 2022: -0.8; 2023: -0.9; 2024: -0.7\n  - Change in reserve assets (Increase (+)): 0.9; 2.6; 0.4; 0.3; 0.2\n  - Net International Reserves — Stock in months of next-year NFGS imports: 6.6\n  - Stock over short-term debt on residual maturity: 4.1; 4.8; 5.1; 5.5; 5.3; 5.7; 6.3\n  - NIR as % of ARA metric: 157.9; 162.9; 174.9; 187.1; 180.9; 172.1; 165.7; 159.4; 152.8\n  - Gross international reserves (US$ billions): 20.0; 21.3; 24.4; 27.7; 28.4; 28.9; 29.4; 30.3\n- Public finances (Central Government):\n  - Revenues: 12.6; 12.4\n  - Expenditures: 14.3; 13.7; 13.4\n  - Current: 11.2; 11.7; 11.9; 12.0\n  - Capital: 2.4; 3.4; 3.3\n  - Primary balance: -1.1\n  - Overall balance: -2.6; -2.8\n  - Financing of the central government balance: 1.3; 2.8\n  - Net external financing: 1.4\n- Central government debt:\n  - 29.0; 27.2; 28.6; 29.3; 30.5\n  - External: 13.0; 13.5; 13.6\n  - Domestic1: 17.2; 16.0\n- Memorandum items:\n  - GDP (US$ billions): 95.6; 104.4; 113.2; 120.9; 130.2; 140.3; 151.3; 163.3; 176.4\n  - Volume of exports and services (annual percentage change): 7.5; -2.4; 5.0; 8.7; 9.0\n  - Volume of imports and services (annual percentage change): 4.9; 5.4; 6.0\n  - Output gap (% of GDP): 0.7; 1.2; 0.1; 0.0; -0.1; -0.2\n  - Terms of trade (annual percentage change): -6.5; 6.1; -0.6\n\nSource: Bank of Guatemala; Ministry of Finance; and Fund staff estimates and projections.\n\n---\n\n\n References\n\n- Guatemala and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- www.imf.org/Guatemlala\n- www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/09/05/pr-25289-guatemala-imf-executive-board-concludes-2025-article-iv-consultation"
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    "Published: September 8, 2025",
    "The Executive Board completed the Article IV Consultation for Guatemala. The authorities have consented to the publication of the Staff Report prepared for this consultation.",
    "Guatemala has maintained a resilient economy with low inflation, ample policy buffers, and, for the last few years, a positive current account, contributing to increasingly favorable market access.",
    "Reforms are needed to shift the country into a high investment/high growth equilibrium and to meaningfully reduce poverty.",
    "The macroeconomic outlook is strong but faces elevated uncertainty from changing trade and migration policies abroad and vulnerability to severe weather events.",
    "Next Article IV consultation expected on the standard 12-month cycle.",
    "Economic growth:",
    "Inflation:",
    "Fiscal and public debt:",
    "Balance of risks:",
    "General assessment:",
    "Fiscal policy:",
    "Monetary and exchange rate policy:",
    "Financial sector and markets:",
    "Governance and structural reforms:",
    "Social and demographic indicators:",
    "Selected economic indicators (annual percent change unless otherwise indicated):",
    "Saving and investment (In percent of GDP):",
    "External sector:",
    "Public finances (Central Government):",
    "Central government debt:",
    "Memorandum items:",
    "[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)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[www.imf.org/Guatemlala](http://www.imf.org/Guatemlala)",
    "[www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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