Guatemala recorded year-on-year inflation of 2.11 percent in September, and reached values observed in November 2021 33 months ago and then began a bullish price spiral in the economy associated with different factors.
The inflation rate was 2.11% lower than the 3.78% observed in July and 3.07% in August, according to the result of the Consumer Price Index (CPI), which is the instrument to measure the behavior of the general price increase in the economy.
Accumulated inflation from January to September was 1.38%, which is less than 1.83% in July and 1.77% in August; while monthly inflation was negative for the second consecutive month and in September it was -0.38%, and in August it was 0.86% (positive).
Marco Antonio Mejía Villatoro, acting manager of the National Institute of Statistics (INE) said, that in September a decrease in the CPI of -0.38% and the inflationary rate of 2.11% and that includes the measurement of September 2023 to 2024, in which we observed inflations that were coming down, but that they continued to be high, and does not mean that in this we will close – the exercise – but it is likely that in November and December there will be an increase, but that the inflation target will be met4.4% more/less than 1% of monetary policy?
In July, a multi-product increase was presented, associated with the beginning of winter and damage to the countryside, as well as the road network infrastructure situation.
The central bank authorities announced on 25 September a downward revision of the indicator, and expect a closure of between 3.75% by December 2024 and by December 2025 at 4%, according to the models carried out. While the economy, as measured by gross domestic product (GDP), would be closing at 3.5% this year, which is the central or core value.
That was one of the reasons why the Monetary Board (WYD) decided to cut 25 basis points to the Monetary Policy Interest Leader rate, which rose from 5 per cent to 4.75%.
Increased incidence and savings
In explaining why the negative performance of monthly inflation (August and September), the manager of the INE specified that it is due to the behavior observed in two spending divisions, which within the structure of the CPI have the highest incidence.
That means, any downward or upward variation in both divisions can have an impact on the variable.
The report indicates that the negative incidence of the food division was -0.26% and transport -0.20%; while the positive divisions were restaurants with 0.04%, housing 0.03% and health 0.01%.
Mejía Villatoro indicated that in the transport division there was a substantial decrease in the price of the gallon of gasoline, and in food, there were some casualties, due to the harvest.
The official report indicates that the incidence of gasoline was negative at -0.23%; fresh tomato -0.08%; potatoes -0.06%; onions -0.03% and .isquil -0.03%. This means that, when showing negative performance in gasoline, motorists have greater purchasing power, because they allocate less spending.
This article has been translated after first appearing in Prensa Libre