Guatemalan Economy Rebounds in a Complicated Scenario: What to Think?

By José Alvarez on November 28, 2019

How does the Guatemalan economy behave when compared to other countries in Central America?

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Credit Card Law: protection or risk?

By Estefanía Luján Padilla on April 21, 2016

March is almost here and Guatemala’s credit card law will soon come into effect. The country’s banks have already been making the necessary changes to comply with the law to prevent delays. The law’s main objective is to end abuses on by the banks when it comes to collecting payment (interest rates and abusive collection practices). However, the law will have negative effects that have mostly gone unnoticed: a price increase in other financial services, and a displacement towards an informal and unregulated market.

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The Justified Appreciation of the Quetzal

By Estefanía Luján Padilla on March 31, 2016

Since January 25, there has been constant speculation about the possible devaluation of the quetzal (Q). After Julio Héctor Estrada, who is part of the Monetary Board, was appointed Minister of Finance warning signals about the currency’s devaluation set off in the country’s financial sector. Most alarming, however, is how Guatemala’s Association of Exporters (Agexport)—with whom the minister has close ties—is pressing for an exchange rate of Q8 to the dollar. According to the union, there is an overvaluation of the quetzal; in other words, an undervaluation of the dollar in the country.

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Differentiated Minimum Wages: An Obsession?

By Clynton López on February 29, 2016

For some time now Guatemalans have vehemently discussed the idea of differential minimum wages as a measure to attract capital to regions where unemployment rates are higher. The debate seems to have lost its theoretical focus and turned into a political issue. In basic economic theory, differential minimum wages themselves are not addressed.

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Guatemala’s Minimum Wage Rise: The Perfect Storm for Exporters?

By Clynton López on January 30, 2016

On December 29, 2015 Alejandro Maldonado’s government announced a minimum wage increase of 4% for agricultural and non-agricultural activities and 3.5% for export and “maquila” activities. Even though the public sectors workers and unions are celebrating this wage increase—they believe any increase is not enough—the minimum wage increase could be damaging for the general economy, particularly for private sectors.

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Are Guatemala’s Public Finances Sustainable?

By Edgar Ortiz on October 21, 2015

The media often report that Guatemala’s current financial situation is stable. We often hear boasts that the country’s public debt to GDP is low compared to other countries in the region. However, despite these claims, government finances have not followed a course that would make us optimistic.

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What’s Behind the Quetzal’s Recent Appreciation?

By Daniel Fernández on October 15, 2015

Latin American economies tend to be highly dependent on raw materials. When the prices of oil and other commodities collapsed in the second half of 2014, Latin American currencies depreciated greatly. The capacity for those countries to generate foreign exchange (FX) reserves was severely affected, resulting in a scarcity of US dollars in their domestic economies that drove the price of dollars higher and plunged local currencies lower.

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What Is the Future of the Guatemalan Banking System?

By Clynton López on October 6, 2015

The Guatemalan banking system, much like the country’s macroeconomic indicators, has been very stable the last few years. The bankruptcies that affected banks and financial intermediaries seem to have been forgotten. In recent history, bankruptcies by financial intermediaries are due to technical mismanagement, scams, or government corruption.

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What Can We Expect From the Guatemalan and Global Economy?

By Clynton López on September 8, 2015

Historically, the Guatemalan economy has had low volatility. For the past twenty years, the average growth rate has been 3.5%. [1] This level of volatility is generally lower than that of the other economies in the region. However, as the country suffers its worst political crisis since 1993, the question on everyone’s mind is, Will the political crisis affect the economy?

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