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Both growth and hardship set to endure in Guatemala

Friday, December 16, 2022

Significance

The country’s poverty rate stood at 52.4% in 2020 according to the World Bank, a 5-percentage-point increase on the level prior to the COVID-19 pandemic. The World Bank nevertheless estimates that this deterioration would have been substantially worse were it not for the government’s policy response.

Impacts

  • Food insecurity in Guatemala, the rates of which are among the highest in Central America, will weigh on GDP growth potential.
  • Social unrest amid a sharp rise in the cost of living and democratic backsliding will increase ahead of the general election in June.
  • Weak infrastructure development relative to competitors will constrain Guatemala’s exports expansion.
  • Increasing rural poverty and agricultural stress linked to climate change will further spur migration.

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