Up to August, the external and internal public debt amounted to $18.463 billion, equivalent to 23.4% of the country's Gross Domestic Product.
According to figures from the Ministry of Public Finance, in the last nine years the debt to GDP ratio has slightly varied, between 23.3% and 24.8%.
Regarding the country's indebtedness level, Abelardo Medina, senior economist at the Central American Institute of Fiscal Studies, said to Dca.gob.gt that "... It is interesting to note that, although Guatemala reports the lowest level of debt in the region and one of the lowest in the world, the evaluation given by risk rating agencies does not reach investment level. This is a product of political instability but, especially, it is due to the limited size of its fiscal revenues."
In the view of Fitch Ratings, despite the high level political noise of the past three years, economic growth has proved relatively resilient, supported partly by favorable external U.S. demand and strong worker remittances flows.
From a report by Fitch Ratings:
Fitch Ratings-New York-17 April 2018: Fitch Ratings has affirmed Guatemala's long-term, foreign-currency (LT FC) Issuer Default Rating (IDR) at 'BB' with a Stable Outlook.
"Structural weaknesses will continue to constrain Guatemala's economy and credit rating over the medium term"
From a press release by Fitch Ratings:
Fitch Ratings-New York-31 March 2017: Structural weaknesses will continue to constrain Guatemala's economy and credit rating over the medium term, says Fitch Ratings. Guatemala's growth rate will rise during 2017 as the effects of the 2015 political crisis gradually fade.
Arguing that the country's credit profile has overcome the political crisis in 2015, the agency has raised from negative to stable the outlook for sovereign debt notes, which still stand at Ba1.
From the press release by the IMF:
New York, June 30, 2016 -- Moody's Investors Service has today changed the outlook on Guatemala's ratings to stable from negative and affirmed the Ba1 government bond and issuer ratings.
International fuding sources may be at risk if the State does not pay the service of the external debt.
Finance officials say they will not have the necessary funds to pay interest on the debt corresponding to November and December, about $142 million. The Deputy Finance Minister, Edwin Martinez, said "... efforts have been made to get the resources, but at this time we have Q700 million ($90 million), which is enough for the payment for this month which is about to end."
Fitch has also downgraded the issue ratings on Guatemala's senior unsecured foreign and local currency bonds to 'BB' from 'BB+', with outlook revised to Stable.
From the press release by Fitch Ratings:
Fitch Ratings has downgraded Guatemala's long-term foreign and local currency Issuer Default Ratings (IDRs) to 'BB' from 'BB+'. Fitch has also downgraded the issue ratings on Guatemala's senior unsecured foreign and local currency bonds to 'BB' from 'BB+'. The Rating Outlooks on the long-term IDRs have been revised to Stable from Negative. In addition, Fitch has downgraded Guatemala's Country Ceiling to 'BB+' from 'BBB-' and affirmed the short-term foreign currency IDR at 'B'.
The Monetary Authority of Guatemala decided, against the vote of banking representatives and private enterprise sectors, to increase debt through issuance by 10.9%.
The main argument by the opposition is that the solution to the problems in the treasury is to reduce state spending, not increase debt. They insist that the money that is going to cover state expenditures in this manner should be invested to facilitate credit for the productive sector, which has suffered a sharp decline.