2023-11-15 23:34:51
The elected government will receive “sufficient resources” to start the year, according to Banguat.
OTHER NEWS: Banguat includes data on exports of services in its reports
The Bank of Guatemala (Wake up) highlighted in its 2023 closing report that the elected government of Bernardo Arevalo will have sufficient resources available in petty cash. While tax collection and remittances improve, they recognize that there is a challenge to address the factors that are needed for the country to achieve better risk ratings.
At a press conference, Banguat presented the 2023 closing report and expectations for 2024, which was previously delivered to the elected government of Arévalo so that it is known to the general population.
The Banguat authorities indicated that 2024 will begin with Q4,206 million, a figure that previous governments did not count on to begin their administration.
“We have told the new team that they are receiving the country in excellent conditions in aspects macroeconomic. For example, they are starting with a good cash balance, which will allow them to execute immediately,” declared Alvaro González Ricci, president of Banguat.
The Banguat authorities presented the 2023 report and 2024 expectations. (Photo: Heidi Loarca/Soy502)
According to the figures presented at the press conference, this is how the beginnings of previous governments have been in terms of cash balances:
2024 Q 4,206.6 million2020 Q 1,028.3 million2016 Q 624 million2012 Q 1,743.5
“The country is receiving Q 2.3 billion in loans in execution; for example, hospital loans, the World Bank’s “Crecer Sano” loan. This means that they are loans that do not have to go to Congress to request approval, which are already in execution. The exchange rate remains stable, a low fiscal deficit of 1.7%, a tax burden close to 12%. It means that the incoming government receives in very good macroeconomic conditions,” he explained.
González Ricci explained that tax collection improved in the last 4 years by 63%. For this 2023, Q85,785 million have been raised out of a goal of Q93,407.6. In 2022 the goal was Q64,279 and Q60,279 was collected.
Regarding the impact of the road blockades that occurred during October, the president of Banguat states that it did not generate a major impact, but rather it was something temporary.
“Despite this break that occurred in distribution chains during the month of October, growth is still 3.5% of the Gross Domestic Product (GDP), which means that there was no effect outside the projections,” explains González Ricci. He explained that what there was was an effect on inflation, the projection was to end with 4.25% (the goal is 4% +-1%), “she pointed out.
Remittances have an upward trend. (Photo: Heidi Loarca/Soy502)
According to the data collected by the National Institute of Statistics (INE), there was an increase in some product prices and with this it is expected that the closure will be 4.95%. The supply chain has already been regularized after the blockades, so inflation would return to normal values in the subsequent months.
The inflation index is also projected to return to its normal values at 4% in 2024, currently at 4.95%. In that sense, considering that oil prices are declining, it is expected that the prices of consumer products will also reduce, although it will not translate immediately.
As for public debt, it remains well below the limit. Guatemala closes 2023 with 28.3% of GDP with respect to public debt, the maximum limit set being greater than 40%.
Banguat sees it as a challenge to improve the gap in financial inclusion. (Photo: Heidi Loarca/Soy502)
In the case of remittances, they show an upward trend and exports will close downwards, but it will be slight since it is estimated that they will grow again for next year.
The end of 2023 is estimated at US$ 21 billion, and in October US$ 16.4 billion have been received. “The months of November and December are high in remittances, we expect growth close to 11% and for this it is projected to increase to US$22,500,” González explained.
The inflation index is also projected to return to its normal values at 4% in 2024, currently at 4.95%. In that sense, considering that oil prices are declining, it is expected that the prices of consumer products will also reduce, although it will not translate immediately. While the public debt remains well below the limit, remittances show an upward trend and exports will close downwards, but it will be slight, since it is estimated that they will grow again for next year.
Improving the risk rating to attract foreign investment is a goal, says Banguat. (Photo: Heidi Loarca/Soy502)
Macroeconomic challenges
The Banguat authorities highlighted that to have better jobs it is necessary to have more foreign investment. For this, the macroeconomy has to be good, for example, it must achieve an improvement in the country’s risk rating. “If it improves, what will be facilitated is that investors will have more confidence in bringing investment to the country, better jobs, reducing migration,” González indicated.
Meanwhile, one of the challenges that Banguat points out is to improve financial inclusion rates, since only 37% of the population over 15 years of age has one or more bank accounts.
In addition, Banguat pointed out that an agreement has been signed with the INE to update the statistics, since many of the raters use outdated data from the INE from 2014, which does not reflect the current panorama of the country to be evaluated. A series of quarterly surveys will be launched starting in mid-2024 on the jobs index.
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