NCSpecial Data Dissemination Standard
Guatemala does not subscribe to the International Monetary Fund's (IMF) Special Data Dissemination Standard (SDDS), but participates in the less stringent General Data Dissemination System (GDDS). A data mission from the IMF went to Guatemala in 2004 and published the results of its work as a Report on the Observance of Standards and Codes (ROSC) in 2005. The ROSC identified the Central Bank of Guatemala, the Ministry of Finance, and the National Statistics Institute as the principle providers of official statistics. While largely approving of Guatemala's ongoing efforts to improve its data dissemination practices, the ROSC found a number of areas where improvements were needed. Nonetheless, the IMF found that Guatemala possessed a broadly adequate legal framework covering its statistical activity, and commended the three agencies for their commitment to progressing in this area. One area of particular weakness was the enforcement of data reporting requirements; another was the need for improvements in methodology.
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According to a 2007 World Bank report, Guatemala’s 2002 Central Bank Law, part of a landmark set of financial sector regulatory reforms, addressed shortcomings in the country’s monetary policy transparency that an unpublished 2001 assessment mission by the International Monetary Fund (IMF) and the World Bank had identified. The five main achievements of the 2002 Central Bank are the clear statement of objectives of the Central Bank of Guatemala (BANGUAT), greater operational autonomy, greater financial autonomy, greater transparency and accountability, and stricter limitations on BANGUAT's Lender of Last Resort assistance. Since the reform, the sole fundamental objective of BANGUAT has been to achieve and maintain price stability. In order to achieve this objective, BANGUAT is aiming at an inflation targeting regime. However, given the authorities’ continuous attempts to stabilize the exchange rate, some IMF publications have concluded that Guatemala might be more appropriately labeled as an exchange rate targeter. At the conclusion of the 2009 Article IV Consultation, IMF Directors recommended the maintenance of exchange rate flexibility to increase monetary policy effectiveness and thereby strengthen the credibility of the inflation targeting framework. In 2009, BANGUAT submitted responses to a questionnaire based on the IMF’s Code of Good Practices on Transparency in Monetary Policy. While BANGUAT indicates that it follows all criteria for the principles of the Code, it falls short of explicitly declaring a level of compliance with these best practices.
Read MoreNCCode of Good Practices on Transparency in Fiscal Policy
The IMF noted in its 2006 Report on Observance of Standards and Code (ROSC) on Fiscal Transparency that Guatemala was progressing in important aspects of fiscal policy transparency. However, further improvements were urged in order to achieve compliance with the IMF's Code of Good Practices on Fiscal Transparency. Of special importance is the adoption of internationally accepted standards for classifying public entities, the expansion of budget documentation, the redefinition of executive and legislative fiscal functions, and improvements in the evaluation and selection procedures for public investment. The ROSC also suggested that there should be formal limits to the opportunity to amend the budget, once it has been approved, and called for an expansion of the Integrated Financial Administration System's coverage to include all the entities that comprise the general government. In addition, the ROSC called for the establishment of legal protections against political interference in tax administration; the introduction of transparent, merit-based hiring; a reduction of the number of entities and activities that are exempt from the Procurement Law, and the strengthening of the external audit function. In 2009, the Office of Fiscal Transparency within the Ministry of Finance completed a survey of its fiscal transparency practices based on the Code. While claiming to comply with nearly all the criteria of the Code’s principles, most of the responses to the survey do not specifically address or refute the particular weaknesses highlighted by the ROSC. A 2009 Article IV Consultation report by the IMF states that fiscal transparency in Guatemala has improved somewhat, but that more work needs to be done.
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