Guatemala: Keeping the Band-Aids On

CENTRAL AMERICA - Report 23 Aug 2013 by Francisco de Paula Gutiérrez

Executive Summary Under our revised 2013-2014 outlook for the Guatemalan economy, real GDP is expected to grow 3%-3.5%; inflation will stay within the Bank of Guatemala´s target range of 3%-5%; and the quetzal will maintain a 7.9-8 per dollar value. The currency will be supported by a good international reserve position, and by capital inflows that fully finance the CAD, which we project at 3.1% of nominal GDP in 2014. With the deficit at about 2.5% of nominal GDP, and the tax burden low (at just over 11%), analysts are watching fiscal accounts. The political situation has deteriorated: sin...

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