Guatemala Inflation


Guatemala: Inflation falls to 18-month low in March

April 9, 2012

In March, consumer prices rose 0.33% over the previous month, which was down from the 0.50% increase recorded in February. According to the National Statistics Institute, the monthly rise reflected higher prices for transport as well as for food and non-alcoholic beverages. Despite the monthly price increase, annual inflation fell from 5.2% in February to 4.5% in March, which marks the lowest reading since October 2010. Moreover, core inflation added 0.29% over the previous month (February: +0.31% month-on-month). As a result, annual core inflation moderated from 4.3% in February to 4.1% in March. At its 28 March meeting, the Central Bank decided to leave the policy rate unchanged at 5.50% for a sixth consecutive month. In its statement, the Bank argued that economic activity in the U.S. has recently gained some momentum. Moreover, economic activity in Europe seems to have improved, despite persistent uncertainty about the ongoing debt crisis. On the domestic front, officials stated that short-term economic indicators continue to point to sustained growth and that inflationary pressures remain strong due to higher global commodity prices. At its current level, inflation sits within the Central Bank inflation target range of 4.5% 1.0% for this year. For 2013, monetary officials have set an inflation target range of 4.0% 1.0%.


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