The loan was backed by the government and its allies and passed by 86 votes in the Central American country’s 160-seat legislature.
Treasury Secretary Alvaro Gonzalez Ricci said this month that the “essential” loan would save funds that could be used for social spending.
The minister said an annual interest rate of 0.75% over the 13-year life of the loan would save about 1.8 billion quetzales ($233.7 million) by replacing more expensive government bonds.
“This is an interest rate that cannot be obtained in the international or local financial markets,” said Gonzalez Ricci.
In April, Fitch Ratings revised Guatemala’s rating outlook to positive from stable, citing the country’s strong economic recovery and fiscal consolidation.
Guatemala agreed on a loan in 2020, but the government submitted it to Congress this year.
Parliamentary elections are planned for next year.
Some critics have said the government should not take out the loan as questions have been raised about how the funds will be used, the media reports.
“Hopefully the Guatemalan people will speak out against this outrage,” opposition MP Samuel Perez said before voting against the loan.
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