Guatemala To Face 2010 With a 2009 Budget

Guatemala's public finances face a tough scenario for 2010, after Congress rejected a proposed larger budget.

Wednesday, December 2, 2009

In 2010, a politically weakened Guatemalan Government will be obliged to find financing to cover an expected $770 million fiscal deficit.

It will be tough to achieve such goal without compromising the country's macroeconomic balance and sovereign debt ratings, so there will probably be important cuts in public spending.

Nicholas Virzi, from the Rafael Landívar University, considers that "the government lost credibility before international financial institutions when the budget was not passed ... this will make it tougher to approve higher taxes, issue bonds or negotiate loans to cover the deficit".

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