The International Monetary Fund (IMF) recently concluded its Article IV mission to Guatemala, with a team led by Alexander Culiuc visiting Guatemala City from June 10-20, 2025. The visit aimed to assess the country's economic performance and provide policy recommendations.
The IMF's preliminary findings indicate that Guatemala's economy has shown resilience despite external risks and domestic challenges. In 2024, real GDP grew by 3.7%, driven by strong private consumption. Inflation rates have decreased significantly, with headline inflation at 1.7% as of May 2025. Meanwhile, the current account surplus narrowed to 2.9% of GDP in 2024 due to increased imports.
Guatemala's fiscal policy is characterized by an investment-focused expansion approach. A supplementary budget passed in August 2024 prioritized infrastructure and social spending, targeting a deficit of 2.7% of GDP; however, the actual deficit was lower at 1%. The fiscal strategy for 2025 continues this trend with an increased focus on infrastructure and social allocations.
The outlook for the Guatemalan economy in 2025 remains positive, with projected real GDP growth at approximately 3¾ percent. However, sustaining this momentum will require consistent policy implementation amidst global uncertainties and political tensions within the country.
In terms of fiscal policy, the IMF supports Guatemala's expansionary stance given expected softening in private demand for the remainder of the year. Structural reforms are recommended to address revenue and expenditure needs while maintaining necessary public investments.
Monetary policies remain broadly appropriate according to the IMF report but could benefit from strengthened transmission mechanisms. Banguat’s response to remittance inflows requires closer coordination with the Ministry of Finance to manage sterilization costs effectively.
Financial stability is supported by sound banking systems in Guatemala; however, continued vigilance is advised alongside regulatory improvements including risk-based supervision and oversight enhancements for fintech services.
Governance reforms are highlighted as crucial for fostering inclusive growth and restoring public trust in institutions. Legislative priorities include adopting laws related to anti-money laundering (AML), beneficial ownership transparency, public procurement processes, and whistleblower protections.
The IMF mission expressed gratitude towards Guatemalan authorities for their cooperation during this consultation process.