Knowledge Note

Guatemala, one of the largest economies in Central America, made significant progress in achieving macroeconomic and democratic stability after a 36-year civil war. Prudent macroeconomic management enabled an annual average growth of 4.2% between 2004 and 2007. However, the global economic crisis of 2008-2009 had a significant impact on the country. Remittances —a key driver of Guatemala’s economy— dropped by 9.5% in 2009. Exports to the US, its main trade partner, also fell. Guatemala is also challenged by significant exposure to natural disasters. Between 1902 and 2005, the country experienced 62 natural disasters, which affected approximately six million people. Since 1969, Guatemala has been building institutions in order to better respond to events affecting its macroeconomic stability. Since 2005, the country has taken significant steps to move from a reactive to a proactive approach to addressing disaster risk by investing in risk mitigation measures.

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