05.06.2026
Guatemala’s economy strengthened in 2025, supported by a surge in remittances, low inflation and resilient private consumption. Growth is expected to moderate in 2026–2027 as remittance growth slows from unusually high levels, but it should remain solid by regional standards. Inflation is projected to return to the central bank’s target range after falling below target in 2025, while fiscal deficits and public debt remain low and manageable. The external position remains strong, supported by remittances, goods exports and high reserves, although the current account surplus is expected to narrow gradually.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 4.2 | 3.7 | 3.8 |
| Inflation (%, yoy) | 1.6 | 3.7 | 3.5 |
| Employment rate (% of working-age population, 15+) | 58.1 | 58.2 | 58.4 |
| Fiscal balance (% of GDP) | -1.1 | -1.4 | -1.4 |
| Gross public debt (% of GDP) | 27.0 | 27.8 | 28.8 |
| Current account balance (% of GDP) | 4.1 | 3.2 | 2.4 |
Growth moderates after a remittance-driven acceleration
Guatemala’s real GDP growth accelerated to 4.2% in 2025, supported by an 18.7% increase in remittances and low inflation, which boosted private consumption. Wholesale and retail trade, financial services and agriculture were among the main contributors to growth.
Growth is projected to ease to 3.7% in 2026 and 3.8% in 2027 as remittance growth slows from historic highs. Export growth is expected to improve, especially if trade arrangements with the United States support market access and investment. However, low investment, weak infrastructure and a segmented labour market continue to limit potential growth.
Inflation returns to the target range
Inflation fell sharply to 1.6% in 2025, helped by lower global fuel prices and stable exchange-rate conditions. It is projected to rise to 3.7% in 2026 and 3.5% in 2027, returning to the Bank of Guatemala’s 3%–5% target range.
The main inflation risks come from higher global oil prices, transport costs and food prices. Because Guatemala is a net fuel importer, a prolonged energy-price shock would quickly affect household purchasing power, especially for poorer households.
Fiscal position remains prudent
The general government fiscal deficit is estimated at 1.1% of GDP in 2025 and is projected to remain modest at 1.4% of GDP in 2026–2027. Spending increased in 2025 from a low base, driven by local public investment, public wages and social spending, while revenues were supported by stronger corporate income tax and VAT collections.
Public debt remains low, rising only gradually from 27.0% of GDP in 2025 to 28.8% in 2027. This gives Guatemala fiscal space, but the main challenge is not debt sustainability; it is the quality and effectiveness of public spending. Higher investment in infrastructure and human capital will require stronger procurement, accountability and implementation capacity.
External position remains strong but remittance-dependent
The current account surplus increased to 4.1% of GDP in 2025, supported by remittances, stronger exports and a smaller trade deficit. International reserves also remain high, providing an important buffer against external shocks.
The surplus is projected to narrow to 3.2% of GDP in 2026 and 2.4% in 2027 as remittance growth slows and higher oil prices raise import costs. Guatemala’s external position remains highly exposed to US economic conditions, migration policy, remittance flows, fuel prices and global demand for exports such as coffee, sugar and textiles.
Overall outlook
Guatemala’s outlook remains stable, with growth expected to stay close to 4% in 2026–2027, inflation returning to the target range and public debt remaining low. However, the economy’s structural challenges remain significant: high poverty, informality, weak infrastructure, low public investment efficiency, insecurity and chronic malnutrition. Sustained progress will depend on improving the business environment, strengthening public institutions, investing in human capital and infrastructure, and creating more formal, productive jobs.
Sources:
World Bank, Guatemala Macro Poverty Outlook, April 2026.
International Monetary Fund, Guatemala: 2025 Article IV Consultation and Staff Report, September 2025.
International Monetary Fund, World Economic Outlook, April 2026.
Bank of Guatemala, Recent Macroeconomic Performance and Outlook, February 2026.
World Bank, Guatemala Country Overview, 2026.
