| Notes: Inflation, economic decline, and civil war impoverished Guatemalans in the 1980s, but good economic performance during the l990s improved their welfare. Inflation peaked in 1990 at 40 percent, but then declined steadily to about 5 percent in 2000. GDP per capita reached
bottom in 1985 and has not yet returned to its 1980 level. Per capita income grew at 1.5 percent per year in the 1990s, not enough to reduce poverty quickly. The poverty rate declined from 63 percent in 1987 to 57 percent in 1998. Economic policies explain much of the performance in the 1980s and 1990s, but the 1990s also saw a favorable institutional change: the signing of a peace agreement between the Government and the guerrillas of the Unidad Revolucionaria Nazional Guatemalteca (URNG) in 1996. The agreement brought to the fore the problems that affect a majonty of Guatemalans: poverty, illiteracy, disease, inequality, exclusion, and violation of human rights. Guatemala improved its institutions and economic policies during the past decade, but it needs to further strengthen its economic institutions and governance system to
achieve and sustain high growth rates. |
