Guatemala: Inflation hits 16-month high in June
July 9, 2013
In June, consumer prices rose 0.62% over the previous month, which was well above the 0.27% rise tallied in May. According to the statistical institute, the reading mainly reflected higher prices for food as well as for housing.
Building on the monthly increase, annual headline inflation climbed from 4.3% in May to 4.8% in June, which marks the highest reading since February 2012. Nevertheless, inflation still remains within the Central Bank's inflation target range of 4.0% plus/minus 1.0 percentage points. Meanwhile, in June, the core inflation index added 0.32% over the previous month (May: +0.23% month-on-month), while annual core inflation remained steady at May's 3.5%.
At its 26 June monetary policy meeting, the Central Bank decided to maintain the policy interest rate at 5.25%, after a 25 basis-point cut in the previous meeting. The Bank justified its decision citing an improving global economic environment as well as healthy domestic demand. Regarding price developments, the Bank stated that inflation will hit the upper band of its inflation target by the end of this year.
FocusEconomics Consensus Forecast panellists see inflation at 4.8% by the end of the year, which is up 0.1 percentage points from last month's estimate. Next year, FocusEconomics Consensus Forecast participants expect inflation to moderate to 4.7%.