Guatemala: 20% of 2012 Budget to be Financed with Debt

Foreign loans, bond issues and grants will finance one-fifth of government spending in 2012.

Monday, September 5, 2011

Revenue generated by taxes and other income will not be sufficient to meet the $9,293 million budget that the government has presented for next year.

Meeting this figure will require funding of over more than $1000 million with a bond debt and a further $737 million in loans which will be requested by the Guatemalan government.

One of the factors forcing the government to consider external financing is the revision of economic growth projection for 2012, which due to the international economic situation, has been revised downward.

This led to a 2012 budget of 15% of GDP.

An article in states: "Public spending will grow by 5.67% compared to the level established this year, making $8793.5 million, but this increase will be less than that between 2010 and the current year, which went up to 9.8% because this year's budget totaled $8.006 million. "

More on this topic

Guatemala: 20% Rise in Tax Collections

July 2011

In the first six months of the year the total raised was $2,778 million, 20% higher than the $2,316 million collected in the same period in 2010.

According to the Tax Authority, revenue from Value Added Tax (VAT) on imports registered an increase of 18.5%, while domestic VAT revenue increased 21.45%.

Danger to Guatamala’s Risk Rating

July 2011

Congress’ slow pace of Congress in approving the fiscal plan and another 12 loans could bring down the country’s risk rating, the finance minister has said.

A low risk rating in the country, difficulties in accessing international credit markets and loss of credibility abroad are some of the situations that could arise if there is no progress in passing the tax package.

Guatemala to invest $641 million

May 2011

Sums of Q3.213 million ($ 412 million) and $ 120.3 million were introduced into the local market in the period up to 24 May

Of the projected debt for this year, 2011, the Ministry of Finance has already placed 42.9%. Congress authorized an issue of $730 million and re-issuing $325 million placed in 2001.

Guatemala to Issue Treasury Bills

May 2011

Lack of flexibility in the loan approval in Congress is forcing the government to resort to other measures.

The Guatemalan government has announced that it will release short-term treasury bills, usually considered a financing tool for emergency liquidity due to their characteristics.

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