Argentina and Guatemala are currently growing at similar rates. Both countries are moving at around 4%, a figure that, at first glance, suggests stability. But that coincidence is misleading. Growth, by itself, says nothing about the quality of an economy or its future. What matters is not how much growth there is, but where that growth comes from and where it leads.
In Guatemala’s case, the answer is clear: consumption. For years, the country has sustained its expansion through household spending, driven by remittances exceeding US$25 billion annually. This is not a recent phenomenon nor something attributable exclusively to this government. It is our national model: consuming today what comes from abroad, without transforming that income into productive opportunities within Guatemala. It is income that sustains the present, but does not become the capacity to produce more tomorrow.
The data is overwhelming. Household consumption represents more than five times the level of investment or exports within GDP. Meanwhile, the share of exports within the economy has been steadily declining over recent decades, falling from nearly 27% of GDP to barely 17%. Guatemala depends less and less on what it produces and sells to the world, and increasingly on what it consumes internally.
This is not a minor detail. It is a structural limit. An economy based on consumption can grow in the short term, but it does not build the foundations of future wealth. Guatemala does not face a growth problem. It faces a model problem.
The Arévalo government not only fails to correct this model: it deepens it, increasing spending without translating it into productive capacity. Between 2020 and 2026, the public budget rose from Q87.7 billion to Q163.5 billion. An increase of nearly 90% in just six years. However, that increase is not reflected in a proportional expansion of infrastructure, energy, or sectors that increase the country’s productive capacity. Spending grows, but the economy does not transform. Money circulates, but it does not build.
Meanwhile, Argentina — despite all its difficulties — is attempting something different: making production profitable. For years, sectors such as agriculture in Argentina operated under a structure that punished production: export taxes, exchange-rate distortions, high costs, and high uncertainty regarding the rules of the game. The result was predictable: lower investment, smaller scale, and reduced growth capacity.
President Milei’s recent measures have sought to reverse that logic. The reduction of export duties, the improvement of relative prices through exchange-rate correction, and the simplification of production-related costs have changed the producer’s economic equation. These are not subsidies, but the elimination of penalties. And the results are clearly visible. Sectors such as agriculture grew more than 6% in 2025, while investment increased by more than 16% and exports by nearly 7.6%. It is not uniform growth. It is directed growth.
This is accompanied by a strategic bet: turning energy into an export engine. With investments in the Vaca Muerta hydrocarbon reserve and new infrastructure, Argentina aims to generate up to US$20 billion annually in energy exports over the coming years. This is not a temporary situation. It is productive planning.
The fundamental difference is simple. Some sectors sell to the local market. Others sell to the world. The latter — agriculture, mining, energy, export-oriented manufacturing — are the ones that bring in new money, generate foreign currency, and allow growth beyond domestic consumption. A country that produces for the world expands its possibilities for growth. One that depends on its own consumption eventually encounters its limits much faster. Argentina is reorganizing its economy toward those sectors of the future. Guatemala, on the other hand, is shutting them down or leaving them forgotten.
That difference becomes evident in the countryside. In Guatemala, agriculture remains one of the main employers. But its structure is incapable of scaling and generating broad growth. Large exporters manage to sustain themselves. Small producers do not grow. They face expensive inputs, limited credit, and low profitability. That is the producer whom the Arévalo government claims to protect, but whom it effectively denies the possibility of growth. Not because they do not work, not because they do not want to invest, but because the system does not allow production to be profitable. And when producing is not profitable, daily effort ceases to be a path toward progress and becomes merely a way to survive rather than prosper. Because a country does not become poorer when it stops consuming. It becomes poorer when it stops producing.
In Argentina, the logic is different. When taxes and costs are reduced, the impact is greater for those with less margin. Small producers do not need subsidies. They need production to be profitable. And there lies the political point that the official Guatemalan discourse avoids: there is no social policy more powerful than making production profitable. And there is no deeper exclusion than preventing it without saying so.
Added to this is a key element: the creation of a stable framework for large-scale investments, particularly in strategic sectors. The investment incentive regime establishes clear conditions for long-term projects in energy, mining, industry, and technology, reducing one of Latin America’s greatest risks: uncertainty.
There lies one of the deepest differences between both models. Argentina is redirecting its economy toward these sectors. The expansion of agriculture, the push for mining, and above all, the commitment to turning energy into a massive source of exports reflect a strategic decision: generating income from outside, not depending solely on the domestic market.
Guatemala, on the other hand, shows the opposite trend. The sectors capable of competing internationally have lost relative weight within the economy, while growth is concentrated in activities dependent on local consumption.
The result is predictable. A country that produces for the world expands its possibilities. A country dependent on consumption quickly reaches its limits. The results are already warning us. Sectors linked to foreign currency generation — agriculture, mining, energy — show stronger dynamism than average, while investment is beginning to recover ground. In Argentina, agriculture grew 16% in the last quarter of 2025; in Guatemala, only 2.1%, and after several years of contraction. In Argentina, mining grew 8.1% during the same period; in Guatemala, it contracted by 4.8%. Guatemala’s energy sector contracted by 1.3%, while in Argentina it grew by 4.7%. But perhaps the most important thing is not the short-term data, but the direction. Argentina is attempting to reorganize its economy to produce more, export more, and generate its own income in the future. It is not just about growth. It is about changing the logic of growth.
But the problem worsens when the State enters the equation. The increase in public spending in Guatemala has not been accompanied by productive transformation. At the same time, debt servicing occupies an increasing share of the budget, competing with real investment in infrastructure or productive capabilities. When the State allocates a growing proportion of its resources to paying debt, it reduces its capacity to act toward the future. Scottish economist Adam Ferguson already warned about this in the 18th century in his Essay on the History of Civil Society (1767).
Every quetzal allocated to debt servicing is a quetzal not invested in infrastructure, security, or productivity. That is not just spending. It is mortgaging the future. And when a country grows through consumption while its State spends more without building productive capacity, it is mortgaging what comes next.
Ramiro Bolaños, PhD. / President of the Center for Thought and Action Factoría Libertatis
References:
Bank of Guatemala, Annual Family Remittances, 2020–2025.
Bank of Guatemala, Quarterly National Accounts, various years.
Ministry of Public Finance, General State Budgets 2020–2026.
Ministry of Economy, Weekly Economic Report, 2024–2026.
National Institute of Statistics and Census of Argentina (INDEC), National Accounts, 2025–2026.
Central Bank of the Argentine Republic, Monetary Policy Report, 2025.
U.S. Energy Information Administration (EIA), Short-Term Energy Outlook, 2026.
Adam Ferguson, An Essay on the History of Civil Society (1767).
