The Bank of Guatemala’s Monetary Board unanimously held the monetary policy rate at 3.50%, judging upside inflation risks from fuel prices and potential El Niño effects to be contained while economic activity remains consistent with the 2026 growth outlook. The rate has declined by 100 basis points over the past year through four 25-basis-point cuts between August 2025 and February 2026. Headline inflation rose to 2.70% in July but remained below the 4.0% plus or minus 1 percentage point target, while forecasts and expectations point to inflation within target in 2026 and 2027; annual gross domestic product growth is projected at 3.3%-5.3% in 2026, in line with most short-term indicators. The global growth outlook remains positive, supported by manufacturing, services, private consumption, technology investment and recovering trade, although the Middle East conflict poses downside risks and leaves the outlook dependent on global energy markets. The Monetary Board said it will continue monitoring external and domestic indicators and take necessary measures to keep inflation within target.
2026-08-26Bank of Guatemala
Bank of Guatemala Holds Policy Rate at 3.50%
The Bank of Guatemala’s Monetary Board unanimously held the monetary policy rate at 3.50%, judging upside inflation risks from fuel prices and potential El Niño effects to be contained. Headline inflation was 2.70% in July, below the 4.0% plus or minus 1 percentage point target, while 2026 gross domestic product growth is projected at 3.3%-5.3%.