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Guatemala's next president

16 August 2019 Kari Pries, Ph.D.

On 11 August, Alejandro Giammattei of the center-right "Let's go for a Different Guatemala" party (Vamos por una Guatemala Diferente: VAMOS) won the second-round run-off vote for Guatemala's presidency (2020-24) with 57.95% of votes versus 42.05% for former first lady Sandra Torres ,who represented the social democratic "National Unity of Hope" (Unidad Nacional de la Esperanza: UNE), with over 99% of the ballot counted. Turnout was modest, at around 40%.

Giammattei will assume the presidency on 14 January 2020 against a slightly deteriorating economic background of IHS Markit-projected GDP growth slowdown from 3.2% in 2019 to 3.0 in 2020, a growing public-sector deficit reaching 1.8% of GDP in 2018, versus 1.3% in 2017, and stagnating fiscal revenues. His policy priorities include expanding free-trade and industrial economic zones, and increasing public-private investment activities, boosting concessions, public-works investment, and leasing agreements. He has also presented plans for labor-market adjustments, seeking to link job-training processes and employment creation with a commercial focus on foreign investment, such as expanding international call-center presence. Giammattei's training and jobs platform has been well-received by the private business sector, reassured by the presence of vice-president-elect Guillermo Castillo Reyes, recently head of the Guatemalan Chamber of Commerce (2014-18).

Significance

Giammattei's policy agenda will face the challenge of an opposition UNE-led Congress; UNE will hold 52 to VAMOS's 17 seats in the 160-seat body. Preliminary 2020 budget negotiations, which began in July 2019, will be a crucial indicator of Giammattei's capacity to implement his program.

VAMOS has indicated its policy priorities are to implement infrastructure projects for port modernization and airport runway expansion to encourage increased exports and to impose government austerity measures including curtailing travel, telephony, and vehicle expenses. Successful negotiation with the United States on a preliminary migration-related agreement including safe-third-country status will be essential to stabilizing Guatemalan public-sector finances.

Opposition party defections to VAMOS during the first few months of the new administration or smooth passage of the 2020 general budget through Congress would be positive indicators of Giammattei's successful navigation of transition-period issues.

Posted 16 August 2019 by Kari Pries, Ph.D., Senior Analyst Country Risk – Americas, IHS Markit

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