The crisis hit Guatemala’s economy hard. In 2020, gross domestic product (GDP) contracted annually by 1.5%. The economic downturn has increased extreme poverty by more than three percentage points, reaching 18.7% in 2020, while the poverty rate remained relatively stable at 50.9%, based on latest international comparable estimations. Before the crisis, Guatemala’s public expenditures on health stood at 5.8% of GDP, almost unchanged over a decade, compared to the averages of 6.8% in the Latin America and the Caribbean (LAC) region and 8.8% in Organisation for Economic Co-operation and Development (OECD) countries. In 2020, 56.0% of people in Guatemala declared being satisfied with health care, a proportion similar to LAC (48.2%) and much lower than the OECD (70.7%). The pandemic particularly affected education. Between March 2020 and May 2021, schools were fully closed for 33 weeks, compared to 26 weeks in LAC and 15 weeks in the OECD. Both children and families suffered a lot as a result, due to the disruption of education and the increased burden of childcare, especially considering that only 40.7% of the population had Internet access, in 2019.

The response of the government was aimed to support the most affected households, workers and enterprises throughout the crisis. In May 2020, the government introduced new programmes targeting workers, families and firms hit by the crisis. Among them, Fondo de Protección del Empleo provided a minimum payment of GTQ 75 (Guatemalan quetzal) per day for workers in the formal sector that decided to suspend contracts temporarily. An energy subsidy was introduced to help households cope with the contraction of income. Similarly, the income support measure Bono Familia is targeted through households’ expenditures on energy. Families who consume less than 200 kWh may be candidates for this aid. The new social programme Bono al Comercio Popular was instituted to help the most vulnerable informal workers, enabling them to access a single bonus of GTQ 1 000. To tackle poverty, Programa de Aporte Económico al Adulto Mayor, a fund introduced in 2005, was reinforced. In August 2020, 100 000 people aged 65 or over living in poverty received a monthly subsidy of GTQ 400. Under the new provisions, older people are entitled to social assistance for life. More generally, in response to the COVID-19 pandemic, tax authorities in Guatemala also extended the deadline for filing certain tax returns. For example, the 2019 income tax return and the corresponding monthly value added tax return were postponed. In addition, the tax audit process, information requests and other procedures were suspended until 15 April 2020. For firms, the government instituted Fondo de Crédito de Capital de Trabajo, a fund that grants loans up to a maximum of GTQ 250 000 to companies affected by this crisis, specifically targeting small and medium-sized enterprises.

Guatemala’s international co-operation projects within and beyond the region are aligned to address the short- and long-term challenges linked to the COVID-19 crisis. The Central American Council of Ministers for Social Integration instructed the Central American Social Integration Secretariat to develop an articulated response and prepare a Plan for Recovery: Social Reconstruction and Resilience of Central America and Guatemala. The plan includes strategic projects organised under three areas of intervention: i) social protection, ii) employability and employment; and iii) informal settlements and sustainable urban development. The projects seek to create the conditions for more resilient, socially just and environmentally sustainable societies. The plan is also an example international co-operation can work beyond the LAC region as it was carried out with support from international partners – the EUROsociAL co-operation programme within the European Union, in alliance with specialised United Nations agencies–.


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