Guatemala: Inflation rises in February
March 7, 2011
In February, consumer prices added 0.75%, which was down from the 0.83% increase tallied in January. The monthly rise mainly reflected higher prices for food and beverages, as well as for transport and communication. Owing to the pronounced monthly price increase, annual headline inflation rose from 4.9% in January to 5.2% in February, which resumed the upward trend that was briefly interrupted in January. The core inflation index, which smoothes more volatile categories of the consumer price index, added 0.57% over the previous month, driving annual core inflation to 3.8% in February from 3.4% in January. Meanwhile, amid signs of a subdued recovery in domestic demand and faster-than-expected growth of the global economy, the Central Bank, at its latest monetary policy meeting on 23 February, decided to keep its reference rate unchanged at the record-low of 4.50%. Monetary officials also acknowledged that the global economic recovery may face risks in the months ahead, as rising commodity prices exert additional price pressures. The next policy meeting is scheduled for 30 March. The Central Bank has an inflation target of 5.0% 1.0% for this year. For 2012, monetary authorities have set an inflation target of 4.5% with a tolerance margin of 1.0%.
Author: Ricardo Aceves, Senior Economist