Guatemala : Expenditure Reform in a Post-Conflict Country
This report is the third in a series of joint Government-World Bank reviews designed support Guatemala's peace process (See report nos. 15352 and 16392). As this report was under preparation in late 1998, Guatemala faced an emergency caused by...
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| Format: | Public Expenditure Review |
| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2000/02/1614805/guatemala-expenditure-reform-post-conflict-country http://hdl.handle.net/10986/15481 |
| Summary: | This report is the third in a series of
joint Government-World Bank reviews designed support
Guatemala's peace process (See report nos. 15352 and
16392). As this report was under preparation in late 1998,
Guatemala faced an emergency caused by Hurricane Mitch and
increasing macroeconomic pressures associated with
expansionary monetary and fiscal policies. Macroeconomic
conditions continued to weaken in 1999, exacerbated by a
number of external shocks, inappropriate macro policies and
a fragile financial system. The success of the privatization
program, in turn fed fiscal illusion, which was especially
hard to resist in an electoral year. The availability of
relatively large privatization proceeds created a sense that
the emerging macroeconomic imbalances could be tolerated,
peace and electoral outlays could be financed without the
need to adopt revenue measures, and that international
reserves were adequate to defend the Quetzal and keep
inflationary pressures under control. While the original
intention of this report was to analyze the fiscal stance
supporting the peace process, progress in the
Government's state modernization program, and
performance in meeting agreed socioeconomic peace targets,
the macroeconomic developments and the possibility of a
major crisis required a more detailed analysis and
intensified policy dialogue on the underlying macroeconomic
risks in Guatemala. This report retains the macro analysis
used in the policy dialogue with the Government. |
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