[{"bbox": [97, 153, 1135, 260], "category": "Text", "text": "initiatives. However, the landscape of information technology (IT) has evolved significantly, presenting both challenges and opportunities. While implementing IT reforms has become increasingly complex, new technologies offer prospects for enhanced aggregation and integration of vast amounts of data, thereby facilitating more informed decision making."}, {"bbox": [97, 285, 1135, 522], "category": "Text", "text": "**Although Guatemala started implementing its IFMIS reform in the late 1990s, lack of proper maintenance and upgrading is posing significant constraints and risks on the capacity and reliability of the existing systems.** Since 1997, three consecutive SIAF (Sistema Integrado de Administración Financiera) projects financed by the World Bank helped build one of the region's most comprehensive PFM information ecosystems both in functional scope and institutional coverage. This digital platform is critical for the efficient and transparent management of public resources in Guatemala. However, over a decade of limited investments and talent exodus has resulted in an outdated and vulnerable ecosystem with a wide array of information tools and technologies with varying degrees of effectiveness. It has also resulted in the creation of information silos which erode the quality and usefulness of PFM information."}, {"bbox": [97, 551, 621, 578], "category": "Text", "text": "**Allocative and operational efficiency of public spending:**"}, {"bbox": [97, 603, 1135, 922], "category": "Text", "text": "**Despite efforts to boost revenues, Guatemala struggles with one of the lowest levels of public expenditure in Latin America, placing pressure on the need to enhance the quality and efficiency of spending.** As of 2022, Guatemala reported the second lowest general government expenditure as a percentage of GDP (14.4 percent) in the region, surpassed only by Haiti (8.3 percent). However, Guatemala holds the potential to raise the standard of its expenditure through the adoption of results-based budgeting practices. Since 2013, supported by the EU's \"Support to Budget Management\" (AGEP) Programme, Guatemala has been implementing the Gestión por Resultados (GpR) methodology, marking significant progress in transitioning budget preparation and execution to a programme-oriented approach. This transition has led to the development of comprehensive plans, programme-based budget documents, and performance indicators. While supportive changes have been effectively integrated into the legal and financial management systems, ongoing assessments, such as the World Bank's Public Finance Review, underscore the necessity for further enhancements in performance indicator design, data quality and utilization of performance data for decision-making processes within the Guatemalan government."}, {"bbox": [97, 948, 1135, 1240], "category": "Text", "text": "**The management of public sector employment and the wage bill presents significant opportunities for improvement and fiscal efficiency.** Guatemala's public employment landscape exhibits distinct characteristics when compared to regional and global benchmarks. In 2022, public sector employment accounted for just 6 percent of total employment, below the Latin America and Caribbean (LAC) average of 12 percent and notably lower than the OECD average of 21 percent. Despite this variance, Guatemala experienced robust growth in both public sector and total employment, boasting the highest annual average growth rate of public sector employment at 4 percent and the second-highest annual average growth rate of total employment at 3.2 percent (OECD, 2024). Concerning Guatemala's public sector wage bill though, employee compensation represented 43.5 percent of the country's total government expenditure in 2021, surpassing other LAC countries, therefore suggesting inefficiencies and resource allocation inadequacies related to the wage bill and the need for analysing the impact of the wage bill on Guatemala's fiscal sustainability and examining public employment and compensation trends."}, {"bbox": [97, 1265, 1135, 1585], "category": "Text", "text": "**Furthermore, enhancements in public expenditure management could bolster Guatemala's efforts in advancing climate mitigation and adaptation, and gender equality policies.** Despite its relatively low global emissions contribution, Guatemala faces significant vulnerability to climate change impacts. Approximately 75 percent of its population is exposed to climate-related threats such as floods, droughts, and landslides, posing adverse effects on livelihoods and economic activities. According to the ongoing Public Finance Review conducted by the World Bank, Guatemala has made commendable strides in establishing a legal and policy framework for climate change; however, it lacks an effective mechanism for resource allocation towards climate mitigation and adaptation programs and projects. There is still ample space to complement these efforts by mainstreaming climate considerations into budgeting, public investment and asset management functions. Additionally, while Guatemala has implemented a gender tag in its budget, the quality of information remains inadequate, with gender-specific data and indicators seldom utilized in budgetary decisions. To address this gap, additional support is needed for enhancing gender budgeting practices to foster gender equality in a more practical and impactful way."}, {"bbox": [1015, 1679, 1144, 1706], "category": "Page-footer", "text": "Page 10 of 38"}]