Energy prices gain weight in inflation and economic growth expectations

Economic agents in Guatemala are now placing greater emphasis on energy prices and external inflation when forming their expectations for the country's economic trajectory. The latest update from the Bank of Guatemala's (Banguat) monthly survey of private sector analysts reveals a heightened awareness of global energy market uncertainties and their impact on domestic economic outlooks.

According to the survey's May results, panelists forecast inflation to be 3.14% for May 2026, climbing to 3.38% in June and 3.44% in July. Projections for the end of the year stand at 4.13% for December 2026 and 4.01% for December 2027. Factors identified as potentially influencing inflation by year-end include energy prices (cited by 15.79% of respondents), external inflation from key trading partners (12.63%), non-energy commodity prices (11.58%), fiscal policy performance, and climatic conditions (both 11.58%).

Regarding economic activity, the surveyed analysts estimate that real Gross Domestic Product (GDP) will grow by 3.8% in 2026 and 3.7% in 2027. The primary drivers influencing this growth are perceived to be energy prices (15.96%), the stability of general price levels (13.83%), fiscal policy performance (12.77%), public and private investment (12.77%), and domestic and international interest rates (10.64%).

Adding to the positive outlook, the Index of Confidence in Economic Activity (Icae) rose to 55.94 points in May, up from 51.53 in April. This figure surpasses the 50-point threshold, indicating a positive sentiment regarding productive activity and business confidence. Conversely, readings below 50 suggest diminished confidence, potentially affecting short- and medium-term business and investment decisions. Despite this, global uncertainty continues to weigh on expectations.