Products & Services
Search
Products & Services

Country Risk Report

Guatemala

Last update – January 2026

Country rating 


LOW RISK FOR ENTERPRISE
Economic risk

Low risk of payments disruption
Business environment risk
Moderate risk of payments disruption
Political risk

Moderate risk of payments disruption
Commercial risk
Low risk of payments disruption
Financing risk
Moderate risk of payments disruption
The country risk assessments are your North Star metrics to make the right decision for your business and understand the risks in international trade. We have always the best solution for your needs

Swipe to view more

Form of state
 Constitutional Democratic Republic
Head of government
 Bernardo Arévalo (President)
Next elections
 2027, presidential and legislative

Strengths & weaknesses

  • Largest economy in Central America with robust macroeconomic management and public debt below 30% of GDP 
  • Resilient growth, supported by remittances and steady domestic consumption, even amid global shocks 
  • Ongoing infrastructure and digital connectivity investments are enhancing competitiveness 
  • Persistent poverty and inequality, with over half the population living below the poverty line 
  • Heavy reliance on remittances and the US labor market exposes the economy to external shocks 
  • Low tax revenues (about 14% of GDP) restrict fiscal space for transformative reforms

Economic overview

Cyclical risks

Guatemala’s economic growth is projected to remain steady at +4% in 2026 and +3.8% in 2027, underpinned by resilient domestic consumption, robust remittance inflows and stable export performance. Inflation has moderated, expected to average 2% in 2026, allowing the central bank to continue gradual monetary easing. However, downside risks persist: a slowdown in the US economy could sharply impact remittances, which account for nearly 20% of GDP and are vital for household consumption. Additionally, global commodity price volatility and climate-related shocks – such as droughts affecting agriculture – pose threats to near-term prospects and add to international trade tensions. While the fiscal deficit is set to widen slightly as the government boosts investment in infrastructure and social programs, prudent debt management and ample reserves support macroeconomic resilience. Nevertheless, external headwinds, including potential trade disruptions and US policy shifts, could test Guatemala’s cyclical stability.

Financing risks

Guatemala continues to benefit from low public debt (below 30% of GDP) and manageable fiscal deficits, projected at around 3% of GDP through 2026. Access to external financing remains favorable, supported by investor confidence and stable sovereign ratings. The domestic financial sector is well-capitalized, with non-performing loan ratios remaining low. However, the business environment is challenged by high informality (about 70% of employment), which limits tax collection and constrains credit access for SMEs. While insolvency data is limited, most businesses remain solvent due to conservative lending and strong remittance-driven demand. Nonetheless, any sharp external shock, such as a drop in remittances or a spike in global interest rates, could strain liquidity and increase insolvencies, especially among smaller firms and informal enterprises. Strengthening the domestic capital market and improving legal frameworks for insolvency remain key priorities. 

Structural business environment risks

Guatemala’s strategic location, competitive labor costs and growing nearshoring trends attract investment in manufacturing, agribusiness and services. However, structural bottlenecks persist: weak infrastructure, limited access to skilled labor and a cumbersome regulatory environment hinder broader investment. Corruption, weak rule of law and increasing security concerns weigh on investor sentiment, particularly outside established export sectors. Recent reforms – including the first anti-trust law and increased public investment – signal progress, but implementation gaps remain. To unlock its full potential, Guatemala should accelerate digitalization, improve vocational training and strengthen public institutions. Enhanced transparency, judicial reform and targeted incentives for formalization are essential for fostering a more dynamic and inclusive business climate.

Political risks

Political risk remains elevated as President Arévalo’s administration faces persistent opposition from entrenched interests and a fragmented Congress. While the 2024 transition was ultimately successful, ongoing legal challenges and sporadic protests, especially among indigenous communities, underscore governance fragility. The government’s reform agenda, focused on anti-corruption, social inclusion and public investment, is ambitious but vulnerable to legislative gridlock and institutional pushback. Voter disillusionment and social tensions may flare if promised improvements in education, health and infrastructure are slow to materialize. Externally, relations with the US, particularly on migration and security, will remain pivotal for stability. General elections are scheduled for August 2027, and the risk of policy reversals, renewed political turbulence and foreign interference in a similar way to what happened in neighboring Honduras cannot be ruled out. 

Trade structure by destination/origin

(% of total, 2024)

Trade structure by product

(% of total, 2024)

Contact 

Luca Moneta
Allianz Trade
+33 (0) 6 70 27 40 16
Send email