Guatemala crisis to hinder growth, says central bank

Bloomberg

Guatemala’s second major political crisis in two years could hurt economic growth if it drags on, interim Central Bank President Sergio Recinos said.
The crisis, which deepened after a court overruled President Jimmy Morales’s attempt to expel UN-backed anti-corruption chief Ivan Velasquez, was a factor in the central bank’s decision not to raise interest rates, and has dampened investor confidence, Recinos said.
“Matters like these political crises don’t stop worrying us,” Recinos said. “If it is prolonged, it would definitely have an affect on economic growth and employment,” he said.
Central America’s largest economy has struggled to fulfill its potential in recent years as a series of corruption scandals and political crises deters investment. The economy, which exports coffee, sugar and textiles to the US, needs annual growth of 5 percent or more to pull people out of poverty, Recinos said.
Recinos is heading the central bank while a trial involving central bank chief Julio Suarez is ongoing. If found guilty of fraud, Suarez would have to resign and a new central bank governor would be appointed by the president to serve until September 2018.