LatinNews Daily - 09 June 2026

*The International Monetary Fund (IMF) has released a statement following a visit to Guatemala for an Article IV consultation which highlights that the country continues “enjoying strong macroeconomic fundamentals”. It states that Guatemala’s GDP grew 4.3% in 2025, above expectations, while inflation closed last year at 1.7%, which is significantly below the central bank (Banguat)’s target of 4.0% with a tolerance range of ± 1.0 percentage point. According to the IMF, Guatemala’s current account surplus widened to 4.7% of GDP while international reserves increased to US$32.7bn, both of which it says reflects “record-high remittances”. It notes that Banguat has kept its policy rate unchanged at 3.5% since February 2026 amid uncertainty over commodity prices and that while the overall 2025 fiscal deficit rose to 1.9% of GDP in 2025, this was short of the budgeted 3.8% largely due to modest capital spending execution, while central government debt was at 27% of GDP. The Fund however notes the impact of oil prices due to the war in the Middle East, highlighting that while 4.4% year-on-year expansion in Q1 economic activity “pointed to a solid 2026”, it forecasts that growth will moderate to 3.75% this year due to the effects of the war. At the same time, it says that the oil price shock calls for “better targeted social safety nets” in response to fuel subsidies announced in April by the left-of-centre government led by President Bernardo Arévalo. At the time Rodrigo Valdés, the director of the fiscal affairs department at the IMF, warned against using “broad-based energy subsidies or excise reductions” to address the global rise in fuel prices, saying that “they distort price signals, are fiscally costly, regressive, and hard to unwind”. Instead, he called for “temporary” support, “targeted to the most vulnerable”.

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