Monetary Board reviews economic projections, confirms growth of 4.1% for 2026 and adjusts remittances and inflation

The members of the Monetary Board (JM) carried out an “x-ray” of the Guatemalan economy, in which they confirmed the growth estimate of 4.1% for 2026 and 4% for 2027, and reviewed variables such as the end of inflation, as well as the income of foreign currency from family remittances.

The review of the economy arises in an international context marked by the geopolitical conflict in the Middle East, which increased international oil prices, as well as by the new forecasts for the global economy recently presented by the International Monetary Fund (IMF), which show a downward bias, the monetary authorities explained.

During the session on April 22, the technical bodies of the Bank of Guatemala (Banguat) made the economic variables official for this and the following year, in the first review that is carried out in 2026, and everything points to a good performance of the sector’s activity.

It was clarified that everything will depend on the evolution of the international conflict, with an estimated maximum duration of the next two months, and its impact, especially in raw materials such as oil. The next review of the national economy is scheduled for August.

Key sectors boost GDP until 2027

José Alfredo Blanco Valdés, vice president of the JM and Banguat, explained to Free press what is expected the growth rate of the economy by 2026 is 4.1%, and that it remains in a range of between 3.1% and 5.1%. By 2027, the growth rate was reported to be 4%, in a range of between 3% and 5%.

Regarding sector activity, Those that would grow the most are financial and insurance activities, with 8.3%; the exploitation of mines and quarries, 7.7%, and construction, 4.7%. Accommodation and food services activities also appear, as well as administrative services activities, with 5% each, according to the review carried out by the technical bodies.

The central banking official explained that the activities of trade and vehicle repair; manufacturing industries; financial activities; real estate activities; construction; agriculture, and accommodation and food service activities would explain around 66% of the GDP growth rate.

He highlighted that these same sectoral activities would have a similar performance in the revised forecasts for 2027.

Private consumption will grow 4% in 2026

Regarding the series of indicators, the new revised figures indicate that the exports would grow 6%, imports, 8%, and private consumption, 4.2%. By 2027, exports 6.5% and imports 8%.

In this regard, Blanco Valdés pointed out that there is a growth in the international price of some goods that are exported and a favorable behavior of external demand by the main trading partners. There are also favorable conditions for domestic demand, with an increase in the average import price by 2026, especially for fuel, and an increase in capital spending with an imported component.

“Private consumption, one can realize that both in 2026 and 2027 will grow by 4%, which is a fairly important level and is associated, in some way, with the growth of family remittances,” he pointed out.

The current account is estimated in the balance of payments at 4.1% for 2026, he explained, due to the projected growth of family remittances, offset by the deficits recorded in the trade balance. In addition, The estimate of foreign direct investment (FDI) flows is US$2,65 million.

Bank credit to the private sector would grow 8% this year and 10% by 2027, especially in the business segment.

The fiscal deficit is projected at 3.6%, as approved in the general budget, and the public debt position with respect to GDP would be 27.6%.

Remittances will grow 5% in 2026 and 3% in 2027

The vice president of Banguat confirmed that remittances for this year were reviewed and, although nominal growth of US$26,806 million (about Q205 billion) is maintaineda growth rate of 5% is also preserved, with a minimum level of 2% and a maximum of 5.5%.

That is, the growth rate would remain at 5% in 2026 and by 2027 it would drop to 3%, with a range between 2% and 4%, for an amount of US$27,610 million (about Q211 billion), which is the new projection.

“Moderation is anticipated in an environment marked by the persistence of a restrictive immigration policy by the United States administration and by the entry into force of a 1% tax on shipments,” stressed the vice president.

Inflation rises to 3.75% by 2026

Another variable that was adjusted in the April review is inflation, so 3.50% What was now planned will be 3.75% for December 2026 and 4% for December 2027.

The explanation of the technical bodies is that the new forecast includes the first-round impact of the increase in oil prices, due to the escalation of the war conflict in the Middle East region (at the end of February).

Another factor is disruptions to global crude oil supplies, as well as the unpredictability of US trade policies.

The estimated underlying inflation is 3.68% for 2026 and 3.75% for 2027.

The goal set by the JM is 4%, plus/minus 1%.

JM remains cautious in the face of global conflict

It was reported that the JM maintains surveillance over the international economic context, especially geopolitics and conflictsince global markets discount that “it would last two months, which would be short-term, for the moment.”

In addition, it was indicated that every day there is new news that at some point “relaxes”, but then tensions “return” to rise.

Regarding the warnings or “warning flags” that remain, it would be that the conflict could last a long time, which the market does not yet estimate, since it foresees a short conflict.

On the other hand, it is considered what the effect of state subsidies will be – Q8 per gallon of diesel and Q5 gasoline, effective as of May 1 –, which coincides with what the market estimates about the possible duration of the geopolitical conflict, and in this way there would be some impact on mitigating inflation.

“For the moment, this central scenario keeps us with a certain prudence and calm macroeconomically, although it is understood that socially, if we say, we must take the precaution that this is not going to affect families in Guatemala,” said the vice president of the JM and Banguat.