Guatemala: Inflation declines to 16-month low in March
April 7, 2014
In March, consumer prices rose 0.23% over the previous month, which followed the 0.20% increase recorded in February. The print mainly reflected that lower prices for alcoholic beverages were offset by higher prices in all of the remaining categories.
Annual headline inflation edged down from 3.5% in February to 3.3% in March, which marked the lowest rate since November 2012. That said, inflation still remains anchored within the Central Bank's tolerance margin of plus/minus 1.0 percentage points around its target of 4.0%. Core consumer prices added 0.24% in March (February: +0.15% month-on-month), while annual core inflation inched down from 2.1% in February to 2.0% in March, which marked the lowest rate since February 2010.
At its 26 March monetary policy meeting, the Central Bank decided to cut the policy interest rate by 25 basis points, reducing it from 5.00% to 4.75%. By cutting the policy interest rate, the Bank aims to keep consumer prices under control at a figure that is in line with its target.
FocusEconomics Consensus Forecast panelists see inflation at 4.7% by the end of 2014, which is unchanged from last month's estimate. In 2015, FocusEconomics Consensus Forecast participants expect inflation to inch down to 4.6%.
Author: Dirina Mançellari, Senior Economist