Covid-19 Response To Significantly Widen Guatemalan Fiscal Deficit

• Increased spending to offset the economic and public health impact of Covid-19 and falling revenues amid a deep recession will increase Guatemala’s budget deficit well above historical averages.
• Fitch Solutions revised its 2020 budget deficit forecast to 5.2% of GDP, from 3.8% previously and the 2021 forecast from 3.6% to 4.8% amid accelerated expenditure growth and the government’s 2021 budget that proposes a slow narrowing of the deficit.
• The debt to GDP forecast for 2020 has also been revised to 33.33%, from 27.3%, due to the sharply larger fiscal deficit.

(Source: Fitch Solutions)