Fiscal Accounts in Central America

The average tax burden for the region is 13.4% of GDP, while the average public expenditure increased from 18.7% in 2013 to 19.2% at the end of 2014.

Monday, November 17, 2014

From the Introduction of the report Macrofiscal profiles in Central America, from Instituto Centroamericano de Estudios Fiscales (Icefi):

The fiscal situation has worsened in Central America in recent months, mainly due to a structural lack of sufficient resources to meet the needs of Central Americans and realize many of the commitments made by governments.

The most significant cases are El Salvador and Honduras which, given the existence of increasing fiscal deficits in recent periods and a significant accumulation of public debt, have embarked on strong austerity programs aimed at trying to reduce spending levels.

A similar situation has been observed in Guatemala, where austerity is the product of both a decline in revenues due to a weakening of the tax administration, and the refusal of Congress to approve the necessary bonds issues to finance part of the expenditure budget .

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