The countries facing the greatest risk of fiscal unsustainability within three years are El Salvador and Honduras, followed by Costa Rica and with less risk, Nicaragua and Panama.
From the "EconomicOutlook"section of the V Report on the State of the Region 2016:
While the Northern Triangle countries strive to reduce or at least maintain constant levels of debt / GDP, Costa Rica and Panama move further away from fiscal discipline, the former at the greatest pace.
From the introduction of a report entitled "Macrofiscal Profiles : 4th Edition." by the Central American Institute for Fiscal Studies (Icefi):
In the area of prioritizing economic stability over the availability of resources to finance development, the countries of the northern triangle in Central America, have generally shown a significant effort to reduce or at least maintain constant levels are Debt / GDP and the fiscal deficit, which means that, tacitly, the fiscal rule of zero growth of public debt is being used, despite the impact this may have on the welfare of the people.
With the recent consent given by the Banguat for a new issuance of new debt totalling $1,917 million to finance the 2015 budget, the fiscal deficit could exceed 2.5% of GDP.
The private sector is not looking favorably on the approval given by the Monetary Board of the Bank of Guatemala for the possible issuance of $1.917 million in debt to finance part of the 2015 expenses, because the fiscal deficit would rise to levels above that considered acceptable in economic terms.
Increased borrowing costs, a disincentive to foreign investment and distrust of economic performance, are part of the expected scenario if public debt growth is not controlled.
Prensalibre.com reports that "... The draft budget for 2015 presented by the Ministry of Finance, amounting to $9.250 million (Q71 thousand 840.8 million), contemplates taking on new debt of about $2 billion (Q15 billion), of which $1.6 billion (Q12 thousand 334 million) came from bonds and loans. "
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.
The Central American Institute for Fiscal Studies has highlighted the unsustainability of the fiscal deficit in Costa Rica, El Salvador, Guatemala and Honduras.
Pensalibre.com reports that "... according to the results of a report by the Central Institute for Fiscal Studies (Icefi) submitted yesterday ... Guatemala, El Salvador, Honduras and Costa Rica find themselves with in unsustainable scenarios regarding public debt in the next few years. "
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.
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.