Summary: Guatemala

Recurrent political instability and weak government institutions continue to affect Guatemala's economic growth prospects. GDP growth at the current level would be insufficient to consistently reduce the country's poverty level. An expected limited fiscal deficit and a balanced current account over the next two years would reflect a low debt level. Sound monetary policy would keep inflation within target. The stable outlook reflects Guatemala's low fiscal deficits, improved external position, and sound monetary policy amid slower economic growth and recurrent political instability that has affected public policy effectiveness. S&P Global Ratings could lower the ratings on Guatemala over the next 12-24 months if political conflict further affects economic growth and sustainable public finances. Sudden increases to the country's debt service

...Key rating factors Institutional assessment 4 Economic assessment 6 External assessment 2 Fiscal assessment: flexibility and performance 4 Fiscal assessment: debt burden 4 Monetary assessment 4 S&P Global Ratings' analysis of sovereign creditworthiness rests on its assessment and scoring of five key rating factors: (i) institutional assessment; (ii) economic assessment; (iii) external assessment; (iv) the average of fiscal flexibility and performance, and debt burden; and (v) monetary assessment. Each of the factors is assessed on a continuum spanning from 1 (strongest) to 6 (weakest). S&P Global Ratings' "Sovereign Rating Methodology," published on Dec. 18, 2017, details how we derive and combine the scores and then derive the sovereign foreign currency rating. In accordance with S&P Global Ratings' sovereign ratings methodology, a change in score does not in all cases lead to a change in the rating, nor is a change in the rating necessarily predicated on changes in one or more of the...

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