Guatemala: Inflation slows in July
August 7, 2013
In July, consumer prices rose 0.30% over the previous month, less than half the 0.62% rise recorded in June. According to the statistical institute, the reading mainly reflected higher prices for transport and food.
Annual headline inflation moderated to 4.7%, down from 4.8% in June, which had marked the highest reading since February 2012. As a result, inflation remains in line with the Central Bank's inflation target of 4.0%, with a tolerance margin of plus/minus 1.0 percentage points. Core consumer prices added 0.13% in July (June: +0.32% month-on-month), while annual core inflation inched down from 3.5% in June to 3.4% in July.
At its 31 July monetary policy meeting, the Central Bank decided to maintain the policy interest rate at 5.25%. The Bank justified its decision, citing a modest global economic recovery as well as healthy domestic growth. Regarding price developments, the Bank stated that June inflation remained in line with the target for this year. However, monetary authorities also identified some upside risks to inflation within its forecast horizon. The Bank pledged that it will act if the inflation trajectory leaves its medium-term inflation target.
FocusEconomics Consensus Forecast panellists see inflation at 4.8% by the end of the year, which is down 0.1 percentage points from last month's estimate. Next year, FocusEconomics Consensus Forecast participants expect inflation to be 4.8%.