Economy 08-08-2018

Guatemala's corruption is harmful to the Central American economy

This follows from the report "The economic and fiscal impact of the fight against corruption in Guatemala", published yesterday by the Central American Institute of Fiscal Studies and the Center for Strategic & International Studies and with which they intend to analyze whether the fight against this scourge It affects the economy.

The fight against corruption and impunity undertaken in Guatemala does not negatively influence the growth of the local economy, but rather is harmful to the indicators of all of Central America.

This follows from the report "The economic and fiscal impact of the fight against corruption in Guatemala", published yesterday by the Central American Institute of Fiscal Studies and the Center for Strategic & International Studies and with which they intend to analyze whether the fight against this scourge It affects the economy.

"Corruption, in the case of the countries of the Central American region, is not the fat that allows the gears of economic growth to move with greater ease (and, therefore, promote it), but the sand that hinders them" , says the document, which ensures that corruption has negative effects on the growth of gross domestic product (GDP) per capita.

In 2017, the growth rate of economic activity decreased compared to the previous year and initially estimated by the Bank of Guatemala (Banguat), according to some due to anti-corruption actions undertaken by the Public Ministry and the International Commission Against Impunity in Guatemala (Cicig).

The true causes

However, official data indicate that among the factors that influenced the moderation of economic growth on the side of aggregate demand are the increase in the inflation rate, the decrease in the growth of bank credit to the private sector, austerity in the government's spending policy, the difficulties of budgetary execution, the government's inability to generate greater fiscal revenues, and, the appreciation of the exchange rate.

On the side of the origin of production is the contraction of the mining and quarrying sector, as a consequence of the temporary suspension of the San Rafael mine and the closure of operations of the Marlin Mine.

And from the regional perspective, argues this study presented in Washington, influenced the behavior of the economic activity of the Central American countries, which shows a lower overall economic dynamism in recent years.

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