Guatemala's Debt, Manageable Now, is Unsustainable Long Term

The president of the Bank of Guatemala, Edgar Barquin warned that "In a decade, the debt level will be critical."

Friday, April 12, 2013

Guatemala's foreign debt currently amounts to 25% of gross domestic product (GDP), and it appears to be far from the critical point, which is indicated by 40% of GDP.

However Barquín explains that the problem is in the low payment capacity of the Guatemalan state, which could be compromised in terms of the maintaining a fiscal deficit at a reasonable level.

The president of the Banguat said that "We have to be careful in handling the debt and that has to do with the budget deficit. According to the Banguat a rate below two percent of the fiscal deficit is sustainable. This year we forecast a deficit of 2.5 percent. That is already high. "

"... The president of the Banguat stressed that the current tax base is too low to maintain such a high public debt, seeing as 15 percent of the budget is designated to paying for it, added to which is the uncertainty prevailing over whether the projected revenue target for this year will be reached. "

Barquín asks: "... Do we want to be like Cyprus or European countries or do we want to be more sustainable over time and discuss these issues extensively? "



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Honduras As Seen by the IMF - April 2018

April 2018

This year it is projected that growth in the Honduran economy will moderate to 3.7%, partly influenced by political uncertainty and less favorable external conditions.

From a statement issued by the IMF:

An International Monetary Fund (IMF) mission, led by Roberto Garcia-Saltos, visited Tegucigalpa during April 3-12 to conduct the 2018 Article IV consultation.

Request for Tax Rise in Guatemala

June 2014

The president of the Bank of Guatemala has stated that in order to sustain the fiscal debt, the tax burden in the Guatemalan economy will have to rise from 11% today to 14%.

An article on Lahora.com.gt reports that, Edgar Barquín president of the Bank of Guatemala, said "...

Guatemala: Public Debt Could Reach 25.5% of GDP

January 2014

The fiscal deficit of 2.3% proposed for the 2014 budget would cause such an increase in the Guatemalan public that could put monetary policy at risk.

In 2014 Guatemala's public debt will increase and it will be approximately $14.670 billion, equivalent to 25.5% of the country's GDP, explained Edgar Barquín, president of the Bank of Guatemala.

Guatemalan Deficit Doubles

November 2010

In the past 3 years, the fiscal deficit rose from $ 595 million in 2008 to $ 1,226 million in 2010.

The rapid growth of public spending was financed with more debt and bonds. Experts consulted by El Periódico noted that this scenario will force the next administration to push for a tax reform.

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