Macroeconomics studies the economy of a country, the particularity of this discipline is the analysis in its entirety, this data has to do with employment, national income, investments, among others. The objective of these global magnitudes is to understand the environment to make decisions and forecast results.
In this context, for Álvaro González Ricci, president of the Bank of Guatemala (Banguat), 2024 looks like a good year for the country in macroeconomic terms. In fact, he commented that Guatemala is one of the few countries in Latin America “that only its leading rate rose 5% in 2023.”
Furthermore, González indicated that inflation is 4.18%, the exchange rate is “totally stable”, there is the equivalent 8 months in imports in international monetary reserves, when what the Monetary Fund asks for is 3 months.
As well as the increasing remittance income that they are a stabilizer and dynamizer of the economy; in addition the dynamism of banking growing in 2 digits.
Meanwhile, Paulo de León, director of Economic and Financial Intelligence at Central American Business Intelligence (CABI), assured that economically he was optimistic with the past government and continues to be so with the current one “because Guatemala’s macroeconomy is good” and listed:
- Low debt levels
- Central bank independence
- National currency reserves
- Trust in banking
- Ample and abundant liquidity
- The Government’s payment system is not going to be interrupted, because this Government entered with the largest amount of cash in the history of any other administration, with a collection surplus
- There is a budget without locks with flexibility to execute
“It is the ideal dream for a Government that is good, transparent and wants to do things well,” added De León.
The real challenge: “Reflecting the macroeconomy to the micro”
González Ricci recognized that the main challenge as a country is to transfer those good numbers from the macroeconomy to the microeconomy, explaining that the macroeconomy is the basis and exemplifying that it is like opening a company that already has authorized credits, initial capital, human resources, everything ready to start producing.
“You cannot have a good micro if there is not first a good macro,” he added, detailing that politics is not tied to the economy and it can be seen in recent years where, despite the political crises, the resilience of the economy “It is unmatched.”
For the official, the challenge for the macro to be reflected in the micro is through:
- Good execution of the State’s income and expenditure budget
- Attract both foreign and local investments
- Invest in road infrastructure, education, health, among other aspects of the country
“With this we can materialize and improve the micro, where the greatest challenge is,” he insisted.
In what Sigfrido Lee, an economic researcher at the National Economic Research Center (CIEN), differed somewhat, indicating that a good macroeconomy is a necessary but not sufficient condition to have economic growth, “more things are needed” such as:
- An efficient economy, with little bureaucracy, simple, easy, predictable and low-cost procedures
- Public investment particularly in logistics, focus on building robust and efficient infrastructure that reduces transaction costs
- Good rule of law, prompt and fulfilled justice
“There we have 3 things that do not allow this macroeconomic well-being to be transferred to microeconomic well-being,” commented Lee, indicating that, if these changes and investments are not made, there is an opportunity to grow, but always less than what might be growing. if we put more emphasis on the strategy of what things to do and how to do them.
“To the extent that you have a solid and strong microeconomy, you will also have more and better jobs and, therefore, more and better well-being for the population”
Sigfrido Lee, economic researcher at CIEN
Reduction of inequality and poverty
For his part, economist Juan Fernando Díaz agreed that growth is important, but although it is a necessary condition, it is not sufficient for this to result in better well-being for the entire population.
For the interviewee, it is necessary to take advantage of the fact that Guatemala has a strong macroeconomic muscle, and that despite its vulnerabilities it has grown when other economies have not; But we must work from the basis of a long-term sustainable improvement of the population, which does not have the same opportunities. Among other actions he mentioned:
- Increase investment opportunities, promoting domestic investment but also being strategic to attract foreign investment. Well, Guatemala still has great challenges in generating new capital to encourage productive activities.
- The country must stop being exclusive, since to date it faces great barriers of exclusion in gender issues, in incorporating workers from rural areas into other chains that allow them to have a higher level of income.
- To reduce inequality and poverty, access to good quality public services and an improvement in the allocation of social spending must be provided.
“To the extent that better income opportunities are generated and the economy is less exclusive, and that there are better social care systems, income and inequality gaps must be reduced and that will cause the benefit of economic growth to spill over throughout the population”.
Juan Fernando Díaz, economist
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