Companies and Banks Opposed to Increasing External Debt

The Monetary Authority of Guatemala decided, against the vote of banking representatives and private enterprise sectors, to increase debt through issuance by 10.9%.

Friday, April 24, 2009


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The main argument by the opposition is that the solution to the problems in the treasury is to reduce state spending, not increase debt. They insist that the money that is going to cover state expenditures in this manner should be invested to facilitate credit for the productive sector, which has suffered a sharp decline.

From the government’s point of view, it is justified to the extent that, as Sergio De La Torre, the representative of the business sector for JM, noted in the article in SigloXXI.com, macroeconomic statistics indicate that the country can still borrow more. "The country's debt levels and debt service are not critical. Then, there has been a drop in tax revenue and a it is expected to continue dropping during the rest of the year. With a budget the size that was approved last year, 49.7 Billion Quetzals and revenue going down, there is obviously a deficit. Last year's budget was based on a projected growth of 4.6%, and the latest revision by the Bank of Guatemala points to a decrease between 1% and 2%."

More on this topic

Sustainability of Public Debt in Central America

June 2013

The Central American Institute for Fiscal Studies has concluded that only the public debts of Panama and Nicaragua, using official data, are sustainable in the medium term.

The main theme of the fifth edition of the 'Lente Fiscal Centroamericano' (Central American Fiscal Lens) is an analysis of debt sustainability in Central America, which depends greatly on interest payments on debt, economic growth, inflation, revaluation and management of the fiscal deficit.

Guatemala: Public Debt Could Reach 25.5% of GDP

January 2014

The fiscal deficit of 2.3% proposed for the 2014 budget would cause such an increase in the Guatemalan public that could put monetary policy at risk.

In 2014 Guatemala's public debt will increase and it will be approximately $14.670 billion, equivalent to 25.5% of the country's GDP, explained Edgar Barquín, president of the Bank of Guatemala.

End of Macroeconomic Stability in Guatemala?

September 2014

Increased borrowing costs, a disincentive to foreign investment and distrust of economic performance, are part of the expected scenario if public debt growth is not controlled.

Prensalibre.com reports that "... The draft budget for 2015 presented by the Ministry of Finance, amounting to $9.250 million (Q71 thousand 840.8 million), contemplates taking on new debt of about $2 billion (Q15 billion), of which $1.6 billion (Q12 thousand 334 million) came from bonds and loans. "

Honduras Raises Debt Issue to $1 billion

December 2013

If the additional tranche of $250 million approved by Congress is placed, the country's debt level will rise to over 40% of GDP.

Honduras's fiscal deficit will go from yellow to red alert if the government decides to issue $250 million more in debt bonds on the international market.

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