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. "

Like its Central American neighbors, Guatemala needs to review the structure of expenditures and revenues and make the necessary cuts needed to avoid debt reaching even higher levels, which would put the country's economic performance at risk.

Carlos González Arévalo, an expert at the Research Association of Social Studies, told Prensalibre.com that "... there is no policy to reverse the revenue situation to close the gap with the amount of debt ... To do that what is needed is to increase the capacity of tax collection and offset weaknesses; control evasion in customs offices and avoid leakage of taxes through tax evasion and smuggling; reviewing tax exemptions and users. "

Source: prensalibre.com

More on this topic

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July 2019

The qualifier is expecting that with the arrival of Laurentino Cortizo to the presidency, "priority will be given to a constitutional review aimed at strengthening institutions, reinforcing the separation of powers and improving controls and balances.”

On July 1, Laurentino Cortizo assumed the presidency of Panama, who assumed power after promising a campaign to reactivate the economy, make constitutional reforms and make structural changes in several entities.

Guatemala: Economy Is Coping With Political Uncertainty

April 2018

In the view of Fitch Ratings, despite the high level political noise of the past three years, economic growth has proved relatively resilient, supported partly by favorable external U.S. demand and strong worker remittances flows.

From a report by Fitch Ratings:

Fitch Ratings-New York-17 April 2018: Fitch Ratings has affirmed Guatemala's long-term, foreign-currency (LT FC) Issuer Default Rating (IDR) at 'BB' with a Stable Outlook.

IMF on Costa Rica: "Unsustainable Fiscal Imbalance"

December 2016

The favorable conditions in the global economy allowed the country to grow by 4.25% in 2016, and administrative efforts to reduce the fiscal deficit were noted, however they will not prevent the debt /GDP ratio from growing.

From a press release by the IMF:

• Costa Rica’s economy growing robustly, GDP expected to growth by 4.25% in 2016
• More needs to be done to stabilize public debt levels
• Key for government and Congress to reach consensus on VAT and income tax reforms proposals to help address fiscal imbalances

Growing Fiscal Risks in Central America

August 2016

The countries facing the greatest risk of fiscal unsustainability within three years are El Salvador and Honduras, followed by Costa Rica and with less risk, Nicaragua and Panama.

From the  "Economic Outlook" section of the V Report on the State of the Region 2016: