S&P 500 falls as ongoing government shutdown, trade jitters weigh
Investing.com -- Fitch Ratings has upgraded Guatemala’s Long-Term Foreign and Local Currency Issuer Default Rating to ’BB+’ from ’BB’ with a Stable outlook, citing solid growth and prudent policies.
The agency also raised Guatemala’s Country Ceiling to ’BBB’ from ’BBB-’.
The upgrade reflects Guatemala’s stable economic growth, longstanding policy prudence, and current account surpluses that are helping build external buffers. Fitch projects continued low fiscal deficits and debt-to-GDP ratios, while increased government infrastructure and social investment boost growth.
Guatemala’s real GDP growth is expected to reach 3.8% in 2025, following 3.7% in 2024. This momentum comes from robust private demand, supported by remittances that increased about 20% year-over-year through September, consumer credit up 10% year-over-year as of September, and strong public investment with central government capital outlays up 32% year-over-year as of August 2025.
The rating agency expects growth to stabilize at 3.7% in 2026-2027, with potential upside from strong capital expenditure execution and progress on public-private partnerships.
Guatemala’s current account surplus is projected to widen to 4.8% of GDP in 2025 from 2.9% in 2024, driven by rising remittances. The central bank’s international reserves have increased to $31.1 billion from $24.4 billion as of December 2024.
Inflation has remained below the 4%±1 percentage point target since mid-2023 and was 1.5% as of September. The central bank has cut its policy rate twice by 25 basis points in August and September to 4.0%.
Fitch expects the central government deficit to widen from 1.0% of GDP in 2024 to 2.5% in 2025 amid higher infrastructure and social spending. Gross government debt is projected to rise to 28.1% in 2025 from 26.3% in 2024, still well below the ’BB’ median of 54.1%.
The ratings remain constrained by governance challenges, with Guatemala scoring particularly low in Control of Corruption and Rule of Law metrics, as well as low GDP per capita.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.