"Fiscal accounts for 2015 anticipate an additional burden of concerns about the sustainability of the public finances of the governments of the region."
From a report entitled "Macrofiscal Profiles: 3rd Edition" by the Central American Institute for Fiscal Studies (Icefi):
The close of fiscal year 2014 has left more uncertainties than certainties in the current panorama for Central America.
The asymmetry of investment flows makes the application of the concept of world income inevitably generates more revenue to the states of powerful economies than those of small ones.
In his opinion piece in Elfinancierocr.com, Manrique Blen points to the difficulties that countries with small economies face when they sign double taxation treaties, as, depending on the characteristics of the signed agreements, they can stop receiving tax revenues that they could have received had they not joined the treaty.
Tax revenues in relation to GDP increased in the Central American countries with the exceptions of Guatemala, where it fell, and Costa Rica, where it did not change.
A report entitled "Tax Statistics" prepared by the Organization for Economic Cooperation and Development (OECD), analyzes the behavior of tax collection in Latin America.
While Nicaragua and Panama have sustainable levels of public debt, for El Salvador, Honduras and Costa Rica the prognosis is "reserved" .
Recent analysis by the Central American Institute for Fiscal Studies (Icefi) reflects very different fiscal situations in each country.
An article in Prensalibre.com states that "data from the report indicates that the country with the greatest debt is El Salvador, as in 2011 it reached 50% of GDP, in 2012 it increased to 52% and it is expected to reach about 54% in 2013.
Analysis of the evolution of fiscal policy in the isthmus, as a reflection of the reconfiguration and influence of the economic elite in the region.
The report "Fiscal policy, elite groups and the state in contemporary Central America" by the Central Institute for Fiscal Studies (Icefi), "recognizes how powerful the present elite groups are and how much influence they have in each of the countries.
Leaders of business associations in the region have indicated that governmental arbitrariness is interfering in Central America’s development.
A statement from the Federation of Chambers of Commerce of Central America (FECAMCO) reads:
Business organizations in the region which make up the Federation of Chambers of Commerce of Central America (FECAMCO) when meeting in Miami, Florida, USA, expressed their "great concern" about the institutional crisis in El Salvador, which they described as an "assault on the rule of law."
A critical view of the simplistic methods used in calculating the tax burden that supports an economy.
When analyzing a tax reform proposal, the first argument considered is what is the percentage of taxes collected by the state in relation to the Gross Domestic Product (GDP) of the country.
Juan Carlos Hidalgo, on his blog at Elfinancierocr.com, shows with solid arguments, the fallacy of comparing, without thorough analysis, the public figures of the ratio of tax revenue to GDP, which leads to erroneous conclusions which usually hide the main problem: the spending inefficiency demonstrated by the state with the money collected through taxes.
Slow recovery tied to a lagging U.S. economy, 3% growth in 2010 due to increased domestic consumption and rising remittances and international trade.
The countries in Central America are recovering gradually, led by a rebound indomestic demand (following its sharpcontraction in 2009), which has partly spilled over into imports. Pickups in exports and morerecently remittances have been further positive developments.
Central America may be directly impacted by the slowdown in the recovery of the world economy.
For the time being, the region's measures of external and internal demand do not seem affected by the threat of lower growth rates for the economies of partner developed countries. Some central banks had raised their expectations but, in view of the risks, they are likely to revise their growth predictions back to original levels between 2.0% and 2.7%.
Central American countries still need to improve their economic performance to reach investment grade ratings.
On its Quarterly Country Risk report for June 2010, the Central American Monetary Council (SECMCA), notes that Moody’s Investor Service improved the foreign currency risk ratings for Guatemala and Nicaragua. For Guatemala, the criteria for this improvement included a stable macroeconomic environment, backed by prudent fiscal and monetary policies, and for Nicaragua improvement in debt indicators and low fiscal deficits.
In El Salvador, the debate over the advantages and disadvantages of dollarization has been reignited, as the government is in need of resources for funding its programs.
President Funes has regretted that Dollarization has limited El Salvador from taking actions to combat the economic crisis. However, Augusto De la Torre, chief economist for Latin America and the Caribbean at the World Bank, repeated that dollarization is not an obstacle, and that in the case of Panama and El Salvador it has been key to relieve them from external pressures and exchange rate volatility.
High taxes and evasion eroding economic growth in Latin America and the Caribbean.
New IDB study says governments must simplify tax systems and reduce evasion
Complex tax systems and widespread evasion are distorting investment decisions by companies in Latin America and the Caribbean, reducing the efficiency of markets and preventing governments from investing in infrastructure, education and other key public goods.
High taxes and evasion eroding economic growth in Latin America and the Caribbean.
New IDB study says governments must simplify tax systems and reduce evasion
Complex tax systems and widespread evasion are distorting investment decisions by companies in Latin America and the Caribbean, reducing the efficiency of markets and preventing governments from investing in infrastructure, education and other key public goods.
The global recovery is off to a stronger start than anticipated earlier but is proceeding at different speeds in the various regions.
A Policy-Driven, Multispeed Recovery
Following the deepest global downturn in recent history, economic growth solidified and broadened to advanced economies in the second half of 2009. In 2010, world output is expected to rise by 4 percent.