Guatemala's Monetary Board holds key rate at 3.50% amid geopolitical easing

Guatemala's Monetary Board has decided to maintain the key interest rate at 3.50% for the first half of 2026. This decision comes amid global pressure and uncertainty stemming from international geopolitical conflicts. Authorities from the Monetary Board announced the unanimous decision, noting that recent announcements regarding an understanding between the United States and Iran have eased pressure on international oil prices.

Álvaro González Ricci, president of the Monetary Board, explained that while global economic growth prospects remain positive, driven by private consumption and favorable international financial conditions, there are increased uncertainties and downward risks due to the geopolitical situation. Significant decreases in international oil prices and derivatives are already impacting global inflation.

González Ricci highlighted that progress in negotiations to end hostilities has recently led to important reductions in international oil prices, which should moderate pressures on global inflation. Internally, short-term economic indicators in Guatemala continue to be positive, aligning with the estimated economic growth for 2026. However, he cautioned that without a definitive peace agreement, external supply shocks affecting domestic fuel and energy prices could persist and impact Guatemala's economic outlook for the year.

Guatemala's monthly inflation in May was -0.12%, with an annual inflation rate of 2.86%. This is lower than the 3.24% recorded in April but higher than the 2.50% in March, when the international geopolitical conflict began. The transport sector notably influenced the Consumer Price Index in May. Projections for inflation at the end of 2026 are set at 3.75%, and 4% for 2027.

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If we compare it with the prices we had