Guatemala SCD Update - Building a Stronger Social Contract through Productive, Inclusive and Sustainable Growth

Jul 19, 2026

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Guatemala SCD Update (March 2022) reviews how demographic change, evolving global conditions, and heightened exposure to natural disasters and climate change are intensifying pressure on the labor market and increasing vulnerability. It analyzes how the 2019–2021 period shows persistent poverty and weak human capital outcomes, despite recovery from the COVID-19 crisis. The report outlines transformation opportunities centered on stronger human capital investment, inclusive job-creating business conditions, and fiscal and spending efficiency with climate adaptation and institutional strengthening.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages58

Reading Time2 h 26 min

Executive Summary

Introduction

Key Contextual Developments, 2015-2021

Key Country Developments, 2015-2021

Opportunities for Transformation and Policy Priorities

Building a more inclusive Social Contract through Human Capital investment

Strengthening the business climate to accelerate job creation

Increasing fiscal revenue and resilience to shocks through climate adaptation

An Agenda for Knowledge and Data Gaps

References

Annexes

Public Disclosure Authorized Public Disclosure Authorized Guatemala SCD Update Building a Stronger Social Contract through Productive, Inclusive and Sustainable Growth March 2022 TABLE OF CONTENTS Executive Summary ...................................................................................................................................... 1 1. Introduction........................................................................................................................................... 7 2. Key Contextual Developments, 2015-2021 .......................................................................................... 8 A faster-than-anticipated demographic transition and a changing international context are intensifying pressure on the Guatemalan labor market................................................................................................. 8 Guatemala’s heightened vulnerability to natural disasters and climate change poses risks .....................9 The Covid-19 crisis has amplified economic uncertainty and will likely have lasting effects on human capital........................................................................................................................................................ 9 3. Key Country Developments, 2015-2021 ............................................................................................ 10 A stable macroeconomic outlook, persistently high poverty rates, dismal human capital outcomes ..... 10 Since 2015, Guatemala made solid progress in certain areas, and its swift economic recovery from the Covid-19 crisis has made it an outlier in the region................................................................................ 13 Guatemala has also experienced important setbacks in a range of key areas ......................................... 14 The updated SCD policy prioritization criteria ....................................................................................... 16 4. Opportunities for Transformation and Policy Priorities...................................................................... 17 4.1 Building a more inclusive Social Contract through more and better Human Capital investment .... 17 Reducing Child Malnutrition and Supporting Early Childhood Development................................... 17 Reversing learning losses, preventing school dropout rates, and supporting skills development...... 19 4.2 A stronger business climate will be crucial to accelerate job creation and boost productivity.........20 Improving the business environment with a focus on high-quality, inclusive employment ................20 4.3 Increased fiscal revenue, greater public expenditure efficiency and resilience to shocks through climate adaptation are essential for a sustainable growth model ............................................................ 22 Mobilizing revenue, promoting the efficiency ofpublic spending, and supporting institutional strengthening ...................................................................................................................................... 23 Promoting resilience to shocks through climate adaptation and disaster response...........................25 5. An Agenda for Knowledge and Data Gaps......................................................................................... 26 6. References........................................................................................................................................... 27 7. Annexes............................................................................................................................................... 32 A1 . Redefining country peers ............................................................................................................ 32 A2 . SCD Update: Selected In-Country Consultations ....................................................................

FAQs

What main factors increase pressure on Guatemala’s labor market according to the update?

The report highlights a faster-than-anticipated demographic transition and a changing international context that together intensify labor-market pressure.

How does COVID-19 affect the outlook discussed in the document?

COVID-19 amplified economic uncertainty and is expected to have lasting effects on human capital, even as GDP returned to its pre-pandemic trend.

Which policy priorities are proposed to build a stronger social contract?

Priorities include more and better human capital investment, improving the business environment for inclusive job creation, and strengthening fiscal revenue and public spending efficiency while adapting to climate-related shocks.

Jul 19, 2026

Upload by Quinn