Guatemala - Vice President Rafael Espada met yesterday with the economic cabinet and the Bank of Guatemala to discuss the international financial crisis and the impact on Guatemala.
According to IBD studies most recently, Guatemala and El Salvador have reported declines in remittance flows. This is the first time in this decade that that remittances for the Latina American and Caribbean are expected to decrease.
Guatemalas main source of external revenues are the remittances from Guatemalan migrants in the US to their families at home. ANACAFE, the National Coffee Asociation has already expressed their concern about decreasing prices in the international coffee markets. Coffee is another of Guatemalas main sources of revenue.
The Vice President stated that the international financial crisis will affect everyone and every country. The International news has shown just that. Iceland, a country that was considered to have a very solid economy, now had to take loans from Russia to avoid national bankruptcy.
Espada considers tat the main sectors that will be impacted are remittances and the building sector. He also pointed out that projects financed with International funds will be affected until a stabilization of the world financial crisis occurs. The Vice- President was optimistic in the sense that Guatemala will not be destroyed by the International crisis. Compared to other countries in the Latina American region the macroeconomic indicators of Guatemala are more solid and positive.
The recession especially in the USA will cause a decrease of the remittances due to less opportunities of work for Guatemalan migrants.
The Chancellor Haroldo Rodas had already made an announcement concerning the International financial crisis; he considers that inflation is one of the most serious challenges that will be faced by the region. He stated that in Guatemala special attention has to be paid to food security issues, sanitation and hygiene for the poorest segments of the population.
One of the important issues that has surfaced immediately after the surge of the crisis is that the countries whose economy is very linked to the US economy like Costa Rica will be affected the most, and has already been affected due to the credit crisis.
Photo press room VP
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