Fitch Ratings confirmed the long-term foreign currency debt default rating of "BB", but changed the outlook from stable to negative.
The review of Guatemala's negative outlook reflects political tension and greater uncertainty in agents, as well as a constant erosion in the government's low tax collection, the rating agency argued.
Due to the eruption of the Volcano of Fire and suspension of the operations of the San Rafael mining company, combined with a drop in the international prices of sugar, coffee and natural rubber, the economy is expected to grow less in 2018.
According to the Bank of Guatemala (Banguat), the projection for economic growth for this year is currently 3.4%, with a range of between 3% and 3.8%.However, due to the events registered throughout the year, it is expected that the growth rate could be reduced to 3%.
The poor performance of the mining sector and the decline in the export price of sugar and coffee could have a negative impact on the outlook for economic growth this year.
According to Bank of Guatemala (Banguat), the recent performance of short-term indicators of economic activity such as the Monthly Index of Economic Activity, imports and family remittances, among other things, they anticipate a performance consistent with the estimate for the end of the year, which ranges between 3% and 3.8%.
Highlights include a long history of macroeconomic stability even during political crises, and authorities' commitment to fulfilling public debt obligations.
From a statement issued by the Bank of Guatemala:
After its recent visit to the country, the rating agency Fitch Ratings confirmed on Friday April 29, 2016, the credit rating of Guatemala at BB with a stable outlook.
Noting the political system's inability to agree on fiscal issues, Standard & Poor's has downgraded, from BB to BB-, the rating for the country's long-term debt, giving it a negative outlook.
Costa Rica Long-Term Ratings Lowered To 'BB-' On Continued Fiscal Deterioration; Outlook Is Negative
25 Feb 2016
Source: Standardandpoors.com
OVERVIEW
The combination of growing spending pressures and lack of tax reform has weakened Costa Rica's public finances and raised its vulnerability to
Update on the economy of a region which in its entirety is the seventh largest economy in Latin America and the Caribbean.
From the Executive summary of the Regional Economic Report 2015 published by the Secretariat of Central American Economic Integration (SIECA):
In 2014 the world stage was conditioned by geopolitical tensions which heightened phenomena such as the fall in oil prices and fluctuations in supply and demand in international markets. The world economy grew by 3.4% in 2014, reflecting a rebound in advanced economies and a slowdown in developing economies, but emerging markets still accounted for 3/4 of global growth.
Just as a company can not make decisions without information regarding the course of its business, no country is able to create a long term development plan without knowing its real needs in depth .
The last census to be published is the one from the Population Reference Bureau (PRB), but "... Some of the data provided are not complete for the country. "
A joint report by the Central Bank of Guatemala confirms the outlook for economic growth of between 3.3% and 3.9% for 2014.
From a summary of a report by the Banguat entitled "Economic Situation and Prospects of the country":
The world economy is recovering and the pace of growth has rebounded, particularly in advanced economies, emerging economies have weakened but are still explaining the dynamism on global growth; although downside risks are still present.
During 2013 the Guatemalan economy continued to recover and show dynamism in most sectors in the country.
The Monetary Authority of Guatemala notes that in 2013 the country had a satisfactory rate of economic activity consistent with the recovery that has been seen in the world economy.
The entity predicts a robust 2014 with a strengthening of economic activity domestically, mainly driven by an acceleration in world trade, in which Guatemala is immersed.
The Central Bank has presented its analysis of the recent performance of the economy and its arguments for maintaining the leading rate at 5%.
From a report by the Banguat:
"The performance of economic activity remains consistent with the annual estimates of GDP growth (3.2% -3.6%), which is reflected in the dynamism of some short-term indicators such as quarterly GDP, IMAE, means of payment, bank credit to the private sector, the volume of imports and exports and remittances. "
General indicators, social indicators, the real estate sector, the external sector, the monetary sector, the financial sector and the fiscal sector, for the period from 2007 to 2012.
Authorities at the Bank of Guatemala have made available to operators and the general public, a publication called "Guatemala in Figures", which contains statistical information collected from various sources, including general indicators, social indicators, the real estate sector, the external sector, the monetary sector, the financial sector and the fiscal sector, for the period from 2007 to 2012.
The Bank of Guatemala's growth forecast of 7.7% has been adjusted to 5.9%, while the Guatemalan Chamber of Construction forecasts 2.9%.
Edgar Barquin, president of the Bank of Guatemala (Banguat), explained that this decision was made based on surveys which reflect employers' decisions about investing, as well as budget execution data, projections and plans by the Government, entry of foreign investment, authorized licenses for construction granted by municipalities, and building spaces.
Projections have been released by the Ministry of Planning on cities, water, energy, population, employment, production, economic development priorities, education, land use, safety, infrastructure and logistics.
With the title "Guatemala 2032, A Vision for the new Katun", the Ministry of Planning and Programming of the Presidency (Segeplan) has presented a document that attempts to visualise Guatemala over 20 years, and the stages within this transition.
According to G & T Continental Bank, Guatemala’s exchange rate will range between 7.3 and 8.3 quetzals to the dollar during 2012.
The general manager of G & T Continental Bank, Federico Linares said that predictions for 2012 are that the exchange rate against the dollar will remain at Q7.8 + / - 0.5. As of Thursday The Bank of Guatemala (Banguat) maintained a rate of Q7.75 to the dollar.
In the second quarter GDP rose by 3.7%, exceeding growth recorded in the previous quarter.
The strong economic dynamism experienced by Guatemala seems to be shared by all economic activities from agriculture to services.
While all sectors showed positive changes in the quarter under review, some performed better, such as the transport, communications and storage sector, which showed an increase of 4%.