Guatemala is the largest economy in Central America in terms of population (estimated at 17 million in 2021) and economic activity (gross domestic product -GDP- of US$ 95 billion in 2022). The country has experienced stable growth (3.5 percent on average in 2010-19), supported by prudent fiscal and monetary management and an open economy.

The country had one of the smallest economic declines (-1.8 percent) in the Latin America and Caribbean (LAC) region in 2020 during the COVID-19 pandemic.

What are the development challenges in Guatemala?

Guatemala’s economic stability has not translated into robust poverty reduction: the country’s poverty and inequality rates are among the highest in LAC, with a large and underserved population, mostly rural and indigenous and employed in the informal sector. Poverty is estimated at 55.2 percent of the population in 2023.

The country’s child malnutrition rate is among the ten highest in the world, with stunting rates in some of the poorest municipalities reaching nearly 90%. 

Extreme weather events and other disasters have reversed human capital gains, damaged infrastructure, reduced agricultural output, and intensified food insecurity. Hurricanes Eta and Iota in 2020 caused infrastructure-related losses equivalent to 0.56% of GDP and agricultural losses of about 0.20% of GDP.

Source: World Bank 2024