Public Investment Efficiency, Growth and Debt Sustainability in Guatemala
September 25, 2025
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Despite having moderate levels of public debt sovereign spreads, Guatemala is a country with limited levels of public investment efficiency (PIE) that actively constrain much needed infrastructure and social investment. This Selected Issues Paper (SIP) analyzes the effects of improving PIE on key real, fiscal and external macroeconomic indicators and finds that higher PIE would allow Guatemala to sustain higher levels of external debt, weaker fiscal balances and current account balances without worsening sovereign risk premia. The overall effect amplifies the welfare benefits of higher PIE for households through higher private consumption.
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
Pages:
12
Volume:
2025
DOI:
Issue:
129
Series:
Selected Issues Paper No. 2025/129
Stock No:
SIPEA2025129
ISBN:
9798229025805
ISSN:
2958-7875
