Colorful city in Guatemala

Guatemala Inflation July 2023

Guatemala: Inflation falls in July

Inflation came in at 4.5% in July, which was down from June’s 4.9%. July’s reading represented the lowest inflation rate since March 2022. Looking at the details of the release, prices for food and alcoholic beverages rose at a more moderate pace in July. In contrast, prices for housing, electricity, water and fuels rose at a faster pace. Meanwhile, clothing and footwear price pressures were broadly steady.

Annual average inflation fell to 8.2% in July (June: 8.5%).

Lastly, consumer prices rose 0.70% over the previous month in July, accelerating from the 0.30% rise seen in June. July’s uptick was the highest reading since October 2022.

On the outlook for inflation, analysts at EIU commented:

“We expect headline inflation to decline […] as global food and fuel prices continue to ease. Tight domestic monetary conditions and a further easing of global supply bottlenecks will also support disinflation. Nonetheless, prices of oil and other fuels will remain above pre-pandemic levels; given that Guatemala is a net importer of these, domestic transport costs are likely to stay elevated in the coming years. Moreover, below-average rainfall as a result of El Niño is likely to weigh on agricultural output and therefore drive up inflation.”

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