Policy Interest Rate in Guatemala
The Policy Interest Rate ended 2022 at 3.75%, up from the 1.75% end-2021 value and down from the reading of 5.00% a decade earlier. For reference, the average policy rate in Central America and Caribbean was 6.40% at end-2022. For more interest rate information, visit our dedicated page.
Guatemala Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for Guatemala from 2024 to 2023.
Source: Macrobond.
Guatemala Interest Rate Data
2020 | 2021 | 2022 | 2023 | 2024 | |
---|---|---|---|---|---|
Policy Interest Rate (%, eop) | 1.75 | 1.75 | 3.75 | 5.00 | 4.50 |
Central Bank holds fire in March
Central Bank extends the pause in its loosening cycle: At its meeting on 26 March, the Monetary Board of the Central Bank of Guatemala (Banguat) unanimously decided to hold its key policy rate at 4.50%. The decision mirrored February’s and followed a cumulative 50 basis points of cuts since September 2024.
Global economic uncertainty and robust economic activity at home dissuade further easing: The Bank noted that price pressures remained below the lower bound of its 3.0–5.0% target range for the sixth straight month in February. Still, Banguat opted against cutting, partly because it expects inflation to rise toward the midpoint of its target band through the end of 2025. Regarding activity, the Bank assessed that economic activity has performed in a manner congruent with its 2025 GDP growth forecast of 3.0–5.0%; however, policymakers highlighted significant uncertainty regarding the economic outlook, particularly concerning U.S. immigration and tariff policy. Together, these factors likely added pressure on the Bank to stand pat. Meanwhile, the Fed held rates unchanged in March, which will have added impetus to Banguat’s decision, with it looking to minimize exchange rate fluctuations.
Easing to resume later in 2025, but upside risks to rates loom: The Bank’s communiqué offered no explicit forward guidance. Our Consensus is for inflation and economic growth to average close to the lower bound of the Bank’s target and forecast range, respectively. As a result, our panelists see scope for Banguat to resume easing its stance this year, penciling in 100–125 basis points of reductions by the end of the year. That said, risks are tilted towards fewer-than-expected cuts as markets continue to pare back their expectations on interest rate reduction in the U.S. The Bank will reconvene on 30 April.
Panelist insight: EIU analysts weighed in: “We expect Banguat to resume rate cuts in the second half of the year and continue gradual easing, reaching a terminal level of 2.75% by early 2027. […] Guatemala's low level of financial intermediation reduces the influence of interest-rate pass-through, and changes in local and global financing conditions influence economic performance. Mr Trump's tariffs and anti-immigration plans could stoke inflationary pressures in the US and prompt the Fed to keep interest rates higher for longer there, limiting the scope for further monetary easing in Guatemala as well.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Guatemalan interest rate projections for the next ten years from a panel of 4 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Guatemalan interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Guatemalan interest rate projections.
Want to get access to the full dataset of Guatemalan interest rate forecasts? Send an email to info@focus-economics.com.
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