Press Release No. 13/62

Press Release: Statement by IMF Deputy Managing Director Naoyuki Shinohara at the Conclusion of his Visit to Guatemala

March 5, 2013

Mr. Naoyuki Shinohara, Deputy Managing Director of the International Monetary Fund (IMF), made the following statement today in Guatemala City:

“It is a great pleasure to be in Guatemala for my first visit to this nation of such rich history and culture. I had the privilege to meet President Otto Perez Molina, and had very productive meetings with Central Bank President Edgar Barquín, Finance Minister Pavel Centeno and Vice Finance Minister Maria Castro. I also had the opportunity to meet several members of Congress as well as representatives of the Economic and Social Council. I would like to express my gratitude to the Guatemalan authorities for their warm welcome.

“Guatemala’s trajectory has been remarkable in the wake of the 1996 Peace Accords, which brought political and economic stability, and improved prospects to its people. The current macro-economic conditions are a testament to the strength of the country’s foundations. Guatemala’s economy is projected to grow at about 3¼ percent in 2013. The fiscal deficit in 2013 remains prudent and public debt is at low levels, and inflation is expected to be close to the upper end of the central bank’s target band of 3-5 percent by end-2013.

“That said, Guatemala also faces important economic challenges. A key priority will be to continue working to secure additional tax revenue to sustain higher levels of priority social spending, needed to promote inclusive long-term growth. In this context, it will be important to avoid new tax exemptions and loopholes, and to press ahead to strengthen the tax and customs administration. Enhancing the efficiency and transparency of public financial management to ensure the delivery of high quality spending is also critical; to this end, we welcome the authorities’ resolve to complete the needed enhancements to the Organic Budget Law.

“Efforts to continue reinforcing the financial system are critical; recent amendments to the banking law to reduce financial sector risks, strengthen supervision, and enhance resolution procedures constitute an important step.

“Overall, the outlook for Guatemala is positive. The macro-economic framework has been well managed and is stable. Major social agenda items such as fostering inclusive growth and reducing poverty, should continue to be key priorities.

“The IMF will continue to work closely with the authorities to provide high-quality policy advice to enhance stability and growth, and further deepening cooperation in important areas of capacity building.

“Once again, I would like to thank the authorities and the people of Guatemala for their warm hospitality. We look forward to continuing our excellent cooperation with the Guatemalan authorities.”