As of October 2016 revenue grew by 8.9% and growth of current expenditure decreased from 7.5% in October 2015 to 3.2% in the same month this year.
From a statement issued by the Ministry of Finance:
A fiscal deficit, accumulated up to October, of 3.9% of GDP and an increase of 5.3 percentage points of income over expenditure, were the results of the central governments fiscal figures at the end of that month.
The government and the opposition have finally reached an agreement and approved the Fiscal Responsibility Law along with the issuance of $550 million in debt securities.
The issuance authorized by the Assembly may be made on the international or local market, and funds will be used to pay principal and interest on short-term debt, budget support and strengthening of the Fiscal Fund at the General Treasury of the Republic.
The government and the opposition have agreed to approve in the first instance an issue of $550 million, not $1.2 billion as claimed by the administration of Sanchez Ceren.
Although the government insists that there is a need is to issue $1.2 billion to cover short - term debts and solve the liquidity problem it is facing, this first agreement to issue $550 million will serve to"... pay for the electricity subsidy for FODES and the mayoral districts."
The non financial public sector deficit was $911 million, equivalent to 1.7% of GDP, improving the position by $103 million compared to 2015.
From a statement issued by the Ministry of Economy and Finance:
The Minister of Economy and Finance (MEF), Dulcidio De La Guardia, presented today at a press conference the results of the Central Government and Non-Financial Public Sector (NFPS) Fiscal Balance for the third quarter of 2016.
Arguing a significant increase in liquidity risk and political divisions that are preventing approval of an issuance of long-term debt, the rating agency has downgraded the rating and changed the outlook to negative.
From a press release issued by Moody's:
New York, November 07, 2016 -- Moody's Investors Service has today downgraded El Salvador's issuer and long-term debt ratings to B3 from B1 and assigned a negative outlook to the ratings, concluding the review for possible downgrade initiated on 11 August.
The institution highlights the restoration of macroeconomic stability, reduction of the fiscal deficit and the rate at which credit to the private sector is increasing.
From a press release issued by the IMF:
On October 26, 2016, the Executive Board of the International Monetary Fund (IMF) completed the combined third and fourth reviews of Honduras’ performance under an economic program supported by a three-year Stand-By Arrangement (SBA) and a two-year arrangement under the Stand-By Credit Facility (SCF). This blended program was approved on December 3, 2014 in the amount of about US$188.6 million (SDR 129.5 million), the equivalent of 100 percent of Honduras’ quota in the IMF at that time (see Press Release No. 14/545).
Although the growth rate of government expenditure has slowed, it is above inflation, while rising incomes have allowed for a reduction of the fiscal deficit compared to last year.
From a statement issued by the Ministry of Finance:
A reduction of ¢168,742 million in the financial deficit (revenues minus expenses), and a difference of seven percentage points between increased income and expenses, are the fiscal figures for the Central Government recorded with just three months to go until the end of the year.
The ICEFI points to a "chronic political inability to achieve comprehensive fiscal agreement" which is jeopardizing the sustainability of the state in the medium and long term.
From a statement issued by the Central Institute for Fiscal Studies (Icefi):
The Central American Institute for Fiscal Studies -Icefi- assessed Costa Rica's budget for 2017, and as a result believes that if the prospects for medium and long term fiscal insufficiency are maintained, there is a serious risk of losing the social achievements of this Central American nation and accumulating fiscal deficits and public debt that could jeopardize the sustainability of the state in the medium and long term.Finally, he reiterated the need for a comprehensive fiscal agreement to ensure economic growth and social welfare in the country.
Standard & Poor's cites persistent difficulties in approving a fiscal reform in the short term, given the political fragmentation that exists in the Legislature.
Analyst Joydeep Mukherji said "... two previous governments have tried to make a fiscal reform and failed and that the government of Luis Guillermo Solis has had difficultyconvincing the Legislative Assembly ...".
The ICEFI highlighted the achievement in reducing the fiscal deficit, but noted "weaknesses in access to information and opacity in the management of public resources."
From a statement issued by the ICEFI:
The Icefi is concerned about the tax changes in recent years because part of its impact is an increase in the regressivity of the tax system, less fiscal space for social spending, as well as a latent opacity in the discussion on the use of State property and new fiscal institutions.These negative effects detract from the achievements made in terms of macro-fiscal stability in the medium term, we warn, this will increase democratic ungovernability, public distrust and restrict the scope for sustainable, sustained and inclusive economic growth.
The financial deficit accumulated up to August 2016 stands at 2.9% of GDP, slightly below the 3.6% recorded in the same period in 2015.
From a statement issued by the Ministry of Finance:
A reduction of ¢157,082 million in the financial deficit (revenues minus expenses), and a difference of seven percentage points between increased income and expenses, were the main fiscal figures of the Central Government recorded at the end of the second quarter of this year.
Once again a warning has been given that without a fiscal agreement the country is at high risk of falling into debt default and losing access to international funding.
Elsalvador.com reports that "...Pedro Argumedo, from the Department of Economic and Social Studies at Fusades, said it is important to reach a Tax Agreement, as failure to do so would lead to consequences that would be 'terrible', and time is growing ever shorter."
The government has already reached 72% of the maximum amount of issuance of Treasury Bills that is permitted by law, and it only has $370 million available to borrow this year.
Given the critical fiscal situation, the Sanchez Ceren administration is insisting in the Legislature on the approval of a bill to issue another $1.2 billion in debt.According to the government, several commitments can not meet unless these funds are available.For the remainder of the year the only remaining possibility is the issuance of $370 million in short-term debt in the local market.
Growth and the external position have been boosted by low oil prices and strong remittances, while the fiscal deficit had declined. However, progress on social objectives is lagging. There are downside risks from global uncertainties and domestic policy constraints.
From the press release by the IMF:
On August 22, 2016, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation1 with Guatemala, and considered and endorsed the staff appraisal without a meeting.2
The accumulated financial deficit in July 2016 stood at 2.6% of GDP, slightly below the value at which it stood in the same month in 2015.
From a statement issued by the Ministry of Finance:
A reduction of ¢134,410 million in the financial deficit (revenues minus expenses), equivalent to more than half of GDP, and a difference of 7.3 percentage points between increased income and expenses, were the fiscal figures recorded for Central Government up to July this year.