The World Bank In Guatemala

Guatemala is the largest economy among the Central American countries in terms of population size and economic activity, with a gross domestic product of US$108.9 million for 2024.

Over the past 10 years, the country has grown at an average rate of 3.5%, driven by prudent fiscal and monetary management, as well as an open economy. In 2024, the country showed positive development, achieving a growth rate of 3.7%. For 2025, it is estimated that the country will grow by 3.5%, driven by the growth of credit and remittances, although limited by a decrease in exports.

Despite the solid growth recorded in recent years and the sustained efforts by the country, Guatemala still faces significant challenges in reducing poverty and inequality, which continue to affect a significant portion of the population. In 2024, 57.3% of Guatemalans live in poverty, with an average income of $6.85 per day. Projections show a trend of gradual improvement: poverty is estimated to decrease to 57.2% in 2025 and to 56.6% in 2026, reflecting steady progress. One of the persistent challenges is the high level of labor informality, which limits opportunities for sustainable income generation; in 2023, about 80% of the employed population worked in the informal sector.

Additionally, job quality is low, and female labor force participation is one of the lowest in the region, around 33%. The country is characterized by high levels of social exclusion, as well as large geographical disparities. Furthermore, frequent natural disasters and threats contribute to high levels of vulnerability among the population, particularly the most disadvantaged. These factors also contribute to emigration, which in turn results in considerable remittance flows. In this regard, in 2024, remittances to Guatemala grew by 8.6%, reaching nearly 20% of GDP.

Guatemala, however, has enormous potential to generate wealth for its population. The country is rich in natural resources, is one of the megadiverse countries, and possesses vast cultural wealth. Nonetheless, its main challenge is to leverage its solid macroeconomic performance to achieve higher and more inclusive growth.

President Bernardo Arévalo took office in January 2024, running on an agenda focused on social and economic investment, and a firm stance against corruption. After one year in office, he has been expanding public investment and social spending, while pushing for structural reforms, such as the approval of the first antitrust law and improvements in infrastructure frameworks. While the government's policy is consistent with higher growth and poverty reduction, efficiency needs to be improved to achieve these goals.

Last Updated: Apr 17, 2025

The World Bank Group’s Country Partnership Framework (CPF) for Guatemala for 2024–2027 supports the country’s efforts to strengthen human capital, increase resilience to disasters, and improve employment opportunities, with a focus on institutional strengthening and promoting inclusion.

This strategy aims to generate impact through investments and technical support in three key development areas. First, it seeks to enhance human capital by improving child nutrition and development, expanding social protection networks, and increasing access to basic services such as health, water, sanitation, and social protection. Second, it aims to strengthen disaster resilience through risk management, the preservation of natural capital, and the development of infrastructure needed to face adverse environmental events, including improved forest management. Third, it will promote better job opportunities by optimizing public spending, enabling increased investment and employment generation in both rural and urban areas.

Additionally, the CPF addresses two critical cross-cutting themes. The first is strengthening institutional capacity, which involves improving the availability, integrity, and transparency of data. The second is promoting inclusion by addressing barriers faced by women and Indigenous groups and fostering their economic empowerment.

The World Bank supports the country through financing, technical assistance, and advisory services to tackle development challenges. Currently, the World Bank’s active portfolio in Guatemala amounts to US$407 million and includes three projects: a development policy operation aimed at enhancing fiscal management, budget efficiency, human capital, and transparency; the Crecer Sano program, focused on child health and nutrition; and an Emission Reductions Payment Agreement (ERPA) designed to address the drivers of deforestation and forest degradation.

This portfolio is complemented by technical assistance and analytical work in areas such as tax administration, sustainable industries, and the reduction of environmental impacts. Additionally, a pilot project financed with US$4.5 million under the Dedicated Grant Mechanism is being implemented to increase the capacity and benefits of Indigenous Peoples and local communities in the sustainable management of forests and natural resources.

The World Bank is also developing initiatives to strengthen modern, safe, and sustainable infrastructure, improve disaster risk management capacity, and ensure access to immediate financial resources in the event of health emergencies or natural disasters.

Last Updated: Apr 17, 2025

Technical support provided by the World Bank and UNICEF to the Ministry of Social Development, for designing a comprehensive information management system and strengthening its social protection systems, allowed the Government of Guatemala to rapidly expand its cash transfers program in 2020 and create the “Bono Familia” to support families during the COVID-19 pandemic. The “Bono Familia” platform enabled beneficiary families (around 2 million) to be identified through a simplified verification process, minimizing personal contact, and the delivery of 1,000 quetzales (US$ 134) per family through “simplified bank accounts”. Money could be received in bank branches or ATMs or used to pay for goods in stores, allowing the expansion of digital payments for thousands of families who lacked access to bank accounts.

Facing one of the highest secondary school dropout rates in the Latin America and Caribbean region, Guatemala had several challenges in accurately identifying students at risk of dropping out and implementing more effectively targeted interventions. The World Bank’s technical assistance from 2018 to 2020 helped strengthen the capacity of Guatemala’s Ministry of Education to collect, manage, analyze, and use high-quality statistical information and pilot the use of an early warning system to identify at-risk students. The pilot, which was implemented in 3,000 schools and prevented approximately 850 children from dropping out, will be scaled up nationwide and will include a guide for teachers on low-cost interventions to prevent dropouts.

The Project to Support a Rural Economic Development Program improved the competitiveness of rural value chains and strengthened the institutional capacity of public entities through the adoption of a land management model. Results of this project, which closed in 2014, include support for more than 200 partnerships with a high participation from indigenous groups; an increase of US$ 16.4 million in these associations’ total sales; rehabilitation and construction of bridges to benefit 160,000 people, and support for the development of 324 municipal development plans.

The Maternal-Infant Health and Nutrition Project helped to provide access to basic health and nutrition services for over one million people through the building or renovation of 35 health centers for maternal and child care, training of more than 5,000 health workers and support to the Comprehensive Community Care program for Children and Women (AINM-C) in 142 jurisdictions, among other activities. The maternal mortality rate declined by more than 50 percent between 2006 and 2012 in the intervention areas, while the percentage of pregnant women who received prenatal care increased from 54 % in 2006 to 89 % in 2012.

Through the Project to Strengthen the Resilience of the Maya and Rural Residents Facing Food Insecurity and Climate Change in Guatemala’s Dry Corridor, the World Bank helped the population cope with climate change through ecologically-sensitive, lower-cost production systems, which increased productivity levels and contributed to food security. The project closed in 2016 and benefitted 1,600 families living in the departments of Baja Verapaz, El Progreso and Jalapa.

The Second Land Administration Project helped improve land tenure security for close to one million people (51 % of which are women) and resolve land conflicts. More than 1,600 indigenous families received titles and four communities benefited from communal land certification, a historic precedent set by the Project, which closed in 2015. The cadastral information generated is now being used by 22 municipalities for multiple purposes, including territorial planning activities.

Last Updated: Apr 17, 2025