Fiscal Balance in Guatemala
Guatemala - Fiscal Balance
Government announces fiscal bandage to curb Covid-19 fallout
Over the course of late March and early April, Congress approved various fiscal aid packages tabled by the government to mitigate the economic fallout from the Covid-19 pandemic. The measures total roughly USD 2.3 billion (3.0% of 2019 GDP) and will be partially financed through loans from the Inter-American Development Bank and the World Bank. In addition, the government will use emergency budgetary reverses and issue treasury bonds. The packages include a host of measures including cash transfers to firms in certain sectors; salary subsidies; special funding for SMEs; income tax and social security contribution deferrals for one quarter; waiving taxes on medical supplies; greater electricity subsidies; and stepping up healthcare spending.
The measures should cushion the economic blow somewhat but will be unable to completely prevent the economy from suffering, given the strict containment measures the government has enacted to reduce the spread of the virus. Meanwhile, the government has some fiscal room to maneuver given the country’s low public debt burden and current account surplus in recent years. However, its ability to act is limited by persistent fiscal shortfalls in recent years and a decline in tax collections.
FocusEconomics Consensus Forecast panelists foresee a fiscal shortfall of 4.5% of GDP in 2020 and of 3.2% of GDP in 2021, with the economy seen contracting 0.9% in 2020, which is down 4.3 percentage points from last month’s projection. For 2021, our panelists expect the economy to grow to reach 3.2%.
Guatemala - Fiscal Balance Data
|Fiscal Balance (% of GDP)||-1.5||-1.1||-1.4||-1.9||-2.3|
5 years of economic forecasts for more than 30 economic indicators.
|Exchange Rate||7.71||0.22 %||Jan 01|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
June 14, 2021
Economic activity increased 12.4% year-on-year in April (March: +9.4% yoy).
June 8, 2021
Consumer prices increased 0.16% from the previous month in May, picking up from the 0.11% increase logged in April.
June 8, 2021
Remittances totaled USD 1,236.7 million in May, jumping 47.8% year-on-year (April: +78..% yoy).
May 26, 2021
At its 26 May meeting, the Monetary Board of the Central Bank of Guatemala opted to keep the monetary policy rate unchanged at the all-time low of 1.75%, marking the seventh consecutive hold. The decision was driven by the Bank’s assessment that indicators continue to show strengthening activity, with the latest data remaining in line with the forecasted 3.0%–5.0% GDP growth for 2021.
May 11, 2021
Consumer prices increased 0.11% in April over the previous month, below March's 0.33% increase.