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A biodiversity hotspot, modern Guatemala was once at the core of the Mayan civilization and still retains strong traces of Spanish colonization in the 16th century. Tourism is the main driver of the economy, but a nascent tech ecosystem has produced some entrepreneurial success stories, including one of the first online reservation sites targeting Spanish-speaking internet users and the language-learning app Duolingo.
Talent Pool & Education
Guatemala's tech ecosystem is still in its early stages, but businesses and the government are increasing their investments. Some significant innovations have come from the country, which is poised to become a significant contributor to the global tech scene. Guatemala's talent pool has substantially developed in recent years. The capital, Guatemala City, has 16 universities, including Universidad Galileo, which is recognised by MIT as one of the leading tech education institutions in the world. Two others, Universidad del Valle and Universidad Francisco Marroquín, are known for providing high-quality education in business administration. Guatemala has the largest market of fintech users in Central America.
Spanish is most widely spoken, alongside 22 different Mayan languages and indigenous Garífuna and Xinca. Locals have limited English.
The largest economy in Central America, Guatemala’s public debt and budget deficit are among the lowest and most stable in the world. While the COVID-19 pandemic ended three decades of economic growth, the country experienced one of the smallest GDP contractions in the region in 2020. Had it not been for the government’s policy response, the World Bank estimates the impact on the country’s already high poverty rates would have been two to three times more severe. Guatemala made a strong economic recovery in 2021, recording GDP growth of 8%. Steady progress is expected to continue. However, risks remain due to a slow vaccination rollout.
The end of President Alejandro Giammattei’s second term will see him step down from office in December 2023. A political newcomer representing an established center-right party is predicted to grab voters' attention before the next election. For now, Giammattei’s right-wing Vamos party is in a weak position in Congress, holding only 16 out of the 160 seats, and is in a fragile informal coalition, raising the potential for legislative gridlock. In the short-term, economic policy will focus on mitigating the effects of elevated inflation and the US slowdown, while keeping the fiscal deficit in check.