The international economic crisis is having a strong impact on the finances of the Guatemalan state, which saw revenue fall by 7.6% in the first quarter of 2009 and this translated to $85 million less in tax income. This was the main argument presented by the Monetary Board to approve the issuance of treasury bonds.
According to an article in prensalibre.com, the next step in order to issue the bonds is the preparation and passage of a bill.
The Deputy Minister of Finance, Carlos Barreda, said that "the bond issue is vital and we hope to do it during the next regular meeting,” and he indicated that there are plans to apply for a support loan of $300 million from the World Bank.
The Monetary Board (JM) authorized the issuance of $ 210 million in treasury bonds by the Ministry of Finance.
If approved by Congress, the Government's deficit this year would reach 3.4% of GDP.
Elperiodico.com.gt reports, "Julio Suarez, vice president of Banguat, announced that JM endorsed his opinion of an increase in public debt, although representatives of the private banking and corporate sectors opposed it."
The Monetary Board approved the issuance of $ 673 million in securities to finance the 2011 budget.
The approval was unanimous, this time with the support of the private bank sector.
"Tulio García, representative of the private sector at the WB, said that opposing the decision of the board was a lost cause, so they opted to seek the Government's commitment for the fiscal 2011 deficit not to exceed 2.7 percent of gross domestic product (GDP) and wait for the year to end between 3.1 to 3.4 percent of GDP," writes Lorena Alvarez from Elperiodico.com.gt.
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