The speed of government borrowing is threatening economic stability.
Improvements in the way money is spent and not unnecessarily increasing the tax burden seems to be the best options available to the Guatemalan government for solving the problem of growing debt, as recommended by experts in the field.
Overall, the internal and external debt of the country amounts to $5,000 million, a high figure that represents the sum of public debt of the three previous government administrations.
Increased economic activity and tax collection imply that increasing taxes will be counterproductive.
The crisis seems to be over. At its worse, fiscal revenue fell, linked to less consumption, exports and imports. This effect teamed with sustained levels of social expenses, and left the government very short on resources, a problem authorities intend to solve via tax hikes.
Chicas Vilchez & Ruiz is a professional finance and accounting firm providing Auditing, Consulting, Outsourcing, and Tax services in El Salvador, Central America and the United States.
Operates in El Salvador, Costa Rica, Guatemala, Panama, Honduras and Nicaragua
Phone: (503) 2264 8069