Guatemala: Financial stability amid elections

Author: | Published: 24 Aug 2015
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Consortium Legal – Guatemala

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Diego Alejos
Guatemalans are just a few weeks away from heading to the polls to participate in the country's general elections (presidential, congress and municipal). As with many other countries in the region, general elections mean political, social and in some cases, even financial disturbance.

This unrest derives from the fact that there is widespread uncertainty as to the outcome of the elections. In addition to the regular election unrest, this year political and social turmoil has been extremely high. Since April, the country has experienced ongoing corruption scandals which have prompted large protests and resignations of key government officials. In one particular case, it has even directly affected a former chief officer of the entity that regulates financial institutions. A criminal investigation has just started. As a general rule, this type of political turmoil could have, in any country, considerable effects on its financial system, but fortunately it has not been the case for Guatemala.

Over the past few years, Guatemala has boasted of having a sound financial system due in part to a growing economy, vigorous financial institutions, and strong supervision from the financial regulators paired with conservative monetary policies. Additionally, there has been an increase in foreign direct investment, a consequence of the country's stable regulatory framework and improvement in its competitive indicators.

While political and social turmoil continue (and will no doubt continue for the rest of the year), it is fair to say that the country´s financial system will remain solid and stable. Whatever the outcome of the nearing elections, the strength of the country´s financial system and its economy is a testament to the millions of Guatemalans who strive to better the nation.

Diego Alejos