The new methodology used by the National Institute of Statistics (INE) since January to measure inflation and, in turn, the Basic Urban Food Basket (CBAU) and the Basic Rural Food Basket (CBAR), has resulted in a slowdown in the inflationary rhythm. and a price reduction as of last March.
Last month’s Consumer Price Index (CPI) indicates that the inflationary rhythm or interannual inflation was 3.24%, while the monthly price increase was 0.31% and the accumulated one, 0.48%.
While the CBAU registered a reduction of Q3.97 in three months, since it went from Q846.30 per person in January to Q842.33 in March, and the CBAR went from Q654.30 to Q650.90, which indicates a lower than Q3.40.
Regarding the Expanded Urban Basket (CAU), it stood at Q2 thousand 38.44 in March, while in January it was Q2 thousand 48.66, for a reduction of Q10.22; while for the Expanded Rural Basket (CAR) the monthly per capita cost was Q1 thousand 282.27 as of March, but in January it stood at Q1 thousand 287.49, which represents a decrease of Q5.22.
Indicator under control
The Bank of Guatemala (Banguat), through a press release, issued its position regarding the INE report, highlighting that an inflation of 3.24% is within the projected goal for this year, which is 4% more/less. 1%.
“The result in March confirms the downward trend that both the projections and the analysis carried out by the technical departments of the central bank anticipated for the first quarter of this year.
Specifically, the result of monthly inflation was influenced, above all, by the increase in the average price of gasoline, fresh lemons, tortillas, passenger transportation and potatoes. These increases were moderated by decreases in the average price of avocados, beef, toilet paper, chicken eggs and tomatoes.
“The result in March confirms the downward trend that both the projections and the analysis carried out by the technical departments of the central bank anticipated for the first quarter”
Statement, Banguat
The slowdown in the inflation rate that has been recorded since March 2023 is the result of the reduction in international prices (imported inflation) and the Monetary Policy decisions adopted by the Monetary Board, which have favorably affected the inflation expectations of the economic agents,” the statement says.
Regarding the outlook for the end of this year, the inflation rate is expected to be 4%, right at the central value of the goal.
“Not reliable”
Adolfo Lacs Palomo, leader of the Union Federation of Banking and Insurance Employees (Fesebs), commented that the change in methodology that the INE applied to make the new calculations of inflation and the cost of food is not reliable, and criteria do not reflect the reality of the cost of living of Guatemalans.
“By making these changes there is an interest in greater stability in the inflationary process, since with the previous system the inflationary rise was observed more quickly, but now it is slower,” criticized the union member.
He cited as an example that housewives or heads of household have perceived and paid an increase in prices of several products in the basic food basket, in this first quarter of the year.
“Another situation is that INE personnel who assist in collecting prices from information sources receive different reference values than those that sellers actually charge to the public. We believe that the INE data are not reliable and do not have the economic or technical resources to carry out a longitudinal measurement. And if someone is bothered by the results, they fight to change the methodology to start once more,” he stated.
Monthly incidence
In the March report presented by the INE, monthly inflation was 0.31%, and “this variation represents an acceleration in the general increase in prices of 0.17 percentage points compared to the previous month (0.14%); that of March 2023 was 0.38%.”
This behavior might be attributed to the effects of the lack of rain on agricultural production and another cause that would explain the price movement is the transportation division, which had an impact of 0.20%, attributed to the upward behavior of fuel prices, since that in the last month constant adjustments to the prices of a gallon of gasoline were reflected and from January to March they have become more expensive by an average of Q4 per gallon, according to the records of the Ministry of Energy and Mines (MEM).
The products that presented the greatest monthly positive impact -increase- were gasoline at 0.19%; followed by güisquil 0.04%; fresh lemons 0.03%; transportation of passengers by air on international schedules and scheduled flights 0.02%; and cabbage, fresh or chilled, 0.01%.
On the other hand, the products that registered the highest negative monthly incidence are fresh tomatoes -0.05%; onions -0.01%; chicken eggs -0.01%; and fresh chicken meat -0.01%.
The report concludes that the food division had an increase of 0.07%, the restaurants division rose 0.02% and recreation, 0.01%, associated in part with seasonal demand due to the Easter holiday.
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