An article on Lahora.com.gt reports that, Edgar Barquín president of the Bank of Guatemala, said "... in order to maintain economic stability and ensure social spending for the benefit of the population, the level of taxes needs to rise to 14 percent of GDP this year. According to the official, rating agencies consistently report that one of the weaknesses in Guatemala, in financial terms, is the low level of taxes."

In order for rating agencies not to lower Guatemala's risk rating "... public debt must not exceed 20 percent of gross domestic product" and in 2014 for the fiscal deficit to be reduced to 1%. "

The chief emphasized that the problem is not so much the spending side but that of state revenues, which "... is still sustainable and manageable."

Source: lahora.com.gt

More on this topic

Standard & Poor's Affirms Costa Rica's Ratings

February 2015

The agency has maintained the rating for sovereign bonds at "BB" but warned of the risks to which the economy is exposed if not a tax reform does not take shape.

From a statement issued by Standard & Poor's:

Standard & Poor 's Ratings Services has affirmed its' BB / B' rating on long- and short-term foreign and local currency sovereign bonds of the Republic of Costa Rica.

Costa Rica: Interest Rates Rise Due to Fiscal Deficit of 5.4%

January 2014

Interest rates usually rise when there is pressure exerted by the Government raising money in colones to finance its deficit.

2013 ended with a deficit of 5.4%, a level not seen since 1995 and one which could lead to an increase in interest rates.

"... Income tax collections grew by only 9%, affected by the slow growth in receipts from General Sales Tax.

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.

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

April 2013

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

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.