Macroeconomic Forecast Guatemala

July 2008 | Macroeconomic Forecasts

BMI View: In line with policymakers across the Latin American region, Guatemala's central bank, Banguat , raised the country's benchmark interest rate by 50bps in July to 7.25%. The authorities have now hiked by 225bps since Q107, but we warn that even more tightening may be required given the current trajectory of headline prices. Inflation came in at 13.6% y-o-y in June, the fastest rate in 15 years. While we expect inflation to come down towards the end of the year (our end-2008 target stands at 9.2%), the prospects of the central bank meeting its 4.0-7.0% comfort zone appear slim.

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