Colorful city in Guatemala

Guatemala Monetary Policy May 2020

Guatemala: Banguat stands pat at its 27 May meeting

At its 27 May meeting, the Monetary Board of the Bank of Guatemala (Banguat) stood pat and kept the key interest rate at an all-time low of 2.00%, where it has been since March.

The decision was based on anchored inflation expectations, and the fact that many governments around the world are lifting restrictions on activity, which Banguat judged would support the Guatemalan economy in H2. While the Bank noted that as a result of the pandemic the Guatemalan economy has been begun to moderate—remittances tumbled in April for instance—this is in line with the Bank’s earlier projections for this year of between a 1.5% contraction and 0.5% growth.

In its press release, the Bank stated it would continue to closely monitor economic developments at home and abroad and their effect on inflation and inflation expectations. Our panelists expect the economy to enter a recession this year, and, as such, project the Bank to cut rates further to soften the fallout from the pandemic. Softening inflation due to weak aggregate demand provides the Bank with room to ease its monetary policy stance. Much will depend, however, on the speed and strength of the gradual normalization of economic activity.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest