"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.
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:
With the exception of improvements in Nicaragua and Honduras, in the rest of the Central American countries problems in public finances range from latent in Panama and already serious in Guatemala, to critical in Costa Rica and El Salvador.
From the report "Macrofiscal Profiles: 4th Edition" by the Central American Institute for Fiscal Studies (Icefi):
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.
The Government risks failing to comply with the current Stand-By Agreement with the International Monetary Fund, as its fiscal deficit would reach 3.9%.
However, Fernando Delgado, IMF representative for Guatemala, stated that “if the Government provides strong reasons for increasing the deficit, the Fund could maintain the Stand-By Agreement”.
Meanwhile, the Guatemalan Congress is awaiting the opinions of the Monetary Board and the Public Finances Ministry to decide if they approve the issue of $563 million to $876 million.
Fitch Ratings warned that although Central American sovereigns have resisted the global crisis pretty well so far, they now require fiscal consolidation in order to maintain their credit ratings.
Summary
Fitch‐rated Central American sovereigns have thus far withstood the destabilizing effects of the global economic and financial crisis, despite monetary and exchange rate policy challenges.
Fitch expects that Latin America’s real GDP will contract by 0.9% in 2009, with Brazil’s economy stagnating at best and Mexico contracting by over 2%.
Latin American economies have recoupled with the crisis in the developed economies. Since September 2008, Latin American countries have been buffeted by stronger external headwinds, as evident from the fall in regional currencies and stock markets and from widening bond spreads.