Guatemala Projects 7.5% Budget Increase for 2027, Focusing on Infrastructure and Security

Guatemala's government has unveiled a preliminary budget for 2027, projecting a total expenditure of Q181.56 billion (approximately $23.5 billion USD). This figure represents a 7.5% increase compared to the current year's budget and is equivalent to 16.6% of the country's projected Gross Domestic Product (GDP). The proposal, presented by President Bernardo Arévalo and Finance Minister Jonathan Menkos, emphasizes strategic investments in infrastructure, citizen security, and social development.

The government aims to maintain sustainable public finances by projecting revenue growth to outpace expenditure increases. Total revenues are expected to rise by 8.7%, driven by a 9.9% increase in tax collection, while overall spending is slated to grow by 8%. The finance minister indicated that financing through bonds, credits, and other sources would increase by 5.5%, with the fiscal deficit projected at 3.7% of GDP, slightly down from the previous year's 3.8%. Public debt is expected to close 2027 at 27.9% of GDP.

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The public budget of Guatemala continues to be the smallest in Central America and one of the smallest in the world, but we are getting the most out of it.

A significant portion of the budget, equivalent to 1.8% of GDP, is allocated to extraordinary investments in strategic projects. These include Q4.8 billion for the second phase of Puerto Quetzal's modernization, Q3.517 billion for priority road projects, and Q1.2 billion for a first-time homebuyer support fund. Additionally, approximately Q8.7 billion is earmarked for fulfilling presidential goals. The budget also incorporates funds for technological innovation, urban transport modernization, and improvements to ports, airports, and the railway system.

Minister Menkos assured that the projected revenue increase would stem from enhanced productivity and stronger measures against tax evasion, explicitly ruling out the creation of new taxes. He noted that Guatemala's public budget remains one of the smallest in Central America and globally, but the government is focused on maximizing its impact. The largest allocations within the budget will go to the Ministry of Education, followed by the Ministry of Health and the Ministry of Interior, which oversees citizen security.

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There will be no new taxes.