The responsibility for changing Guatemala’s course falls on each one of us.
On November 27, Congress approved the largest budget in Guatemala’s history: Q. 148 billion (USD 19 billion), equivalent to 18.6% of the 2023 GDP. This represents almost one-fifth of our economy. This budget, loaded with irregularities, threatens to bring serious consequences for the country.
However, the problem lies not only with Congress, but also with our passivity as citizens. In 2020, a budget of USD 12.8 billion (48% smaller than the current one) triggered massive protests, including the occupation and burning of part of Congress. Today, faced with an even more harmful budget, the reaction is limited to a small demonstration in Zone 1 and mild statements from business chambers. Is it apathy, ignorance, or simply resignation?
A shameless Congress
It is scandalous that lawmakers increased their salaries from Q. 27,000 to Q. 50,000 per month. Who knows someone whose salary almost doubles overnight? In countries such as Kenya, North Macedonia, or even Australia, much smaller increases have provoked massive protests. In Guatemala, barely a whisper.
An unsustainable deficit
The budget spends money we do not have. The deficit rises from Q. 20.607 billion in 2024 to Q. 29.412 billion in 2025 (a 43% increase). To finance it, the government will resort to treasury bonds (Q. 25.104 billion), external debt (Q. 2.406 billion), and a reduction in cash reserves. This indebtedness does not translate into real benefits for the population, but rather into interest payments and the financing of vested interests and clientelism.
History is clear, yet we continue ignoring the signs of an economic storm […] It is time to build a better future for everyone, especially for the most vulnerable. Remember: the responsibility for changing Guatemala’s course falls on each one of us.
For example, the Departmental Development Councils (Codedes) will receive more than Q. 12 billion, despite the fact that their current execution rate is laughable. According to Segeplan, of the Q. 5.123 billion allocated for 2024, they have executed only Q. 1.528 billion. How do they plan to manage ten times more in 2025?
Possible consequences
If the government executes the entire budget, we will face inflation and an increase in the cost of the basic food basket. Corrective measures such as price controls will bring shortages, instability for small business owners, unemployment, and a distorted macroeconomy. On the other hand, if they fail to execute the budget, the economy will suffer stagnation and slowdown, as has already begun to be noticed this year.
The alarms are sounding, yet neither the government nor the population seem to notice. To illustrate this, let us remember the case of Venezuela, which in 2018 reached hyperinflation of 130,060%. This phenomenon resulted from financing the fiscal deficit through money printing, an uncontrolled expansion of the money supply without backing, maintaining high public spending despite the fall in oil revenues since 2014, and the implementation of strict price controls. These measures caused shortages of goods, uncontrollable price increases, and a massive migration of Venezuelans fleeing the crisis.
Another example is Argentina, where the uncontrolled fiscal deficit that began in 1985 led the government to resort to unprecedented monetary expansion. The Central Bank carried out a massive issuance of money to cover the government deficit, resulting in real interest rates above 20% annually. Attempts to curb inflation through price agreements and freezes failed, unleashing an inflationary spiral that culminated in the devaluation of the currency of that time, the Austral, and a 40% fall in export product prices. Political and social instability generated a wave of looting, fear of military coups, and ultimately the early resignation of President Alfonsín in 1989.
An urgent call
History is clear, yet we continue ignoring the signs of an economic storm. In my next column, I will analyze effective strategies that can lead the country toward a virtuous cycle of growth and prosperity, such as those Javier Milei is implementing with great success in Argentina. Meanwhile, we can still avoid a crisis if we adopt responsible political awareness, work hard, and design a sustainable growth plan. It is time to build a better future for everyone, especially for the most vulnerable.
Remember: the responsibility for changing Guatemala’s course falls on each one of us.
