This Selected Issues paper estimates both Guatemala’s potential output and output gap using a wide range of econometric techniques. The analysis suggests that Guatemala’s potential output growth is about 3.5 percent for the whole sample period and that the output gap is almost...

The Guatemalan economy is recovering faster than anticipated during the previous program review. The economic outlook has improved since the second program review. The fiscal deficit in 2010 will decline somewhat. There was agreement that a comprehensive tax reform remains the key medium-term...