This week, the Monetary Board (JM) carried out an evaluation of the economy, in which it confirmed that it would grow 4.1% this year and 4% in 2027. which has generated analysis by specialists, especially due to the international environment, marked by the geopolitical conflict in the Middle East and the constant rise in the price of a barrel of oil, which has impacted the market for refined products that Guatemala imports one hundred percent and that already generated pressure on prices last March.
The monetary authority keeps the economic growth forecasts intact and adjusts the inflation variables, which now stands at 3.75% for the end of the year, as well as the income from family remittances, which is also adjusted. These are signs of the consistency of the productive apparatus in Guatemala.
In sectoral activity, the 17 activities will maintain positive performance, and private consumption will be sustained this and next year.
The new calculations were made official by the members of the Monetary Board in the session on Wednesday, April 22. Next week the decision on the leading monetary policy interest rate will be known, in a context in which the International Monetary Fund (IMF) reviewed the conditions of the global economy and the possible risks.
The official document will also be presented in May to the Technical Commission of Public Finances (CTFP), to begin developing the scenarios of the 2027 income and expenditure budget projectfor the financial coverage of the last year of the current administration.
Economy grows, but with risks
Free press consulted the economists Maynor Cabrera, analyst at the Economics for Development Foundation (Fed), and Fernando Sprossassociate researcher in the economic area of the Foundation for the Development of Guatemala (Fundesa), who evaluated the review carried out.
“It is a safe bet for Banguat, although optimistic for 2027; perhaps they estimate that the conflict will be resolved soon and its consequences will be minor,” Cabrera noted.
He added that the 4% rate is a good forecast for 2026. “It is very likely that the trend will continue this year, despite the fact that there are many frictions at the international level that can affect us in different ways.”
Besides, The impact of the El Niño phenomenon can be felt in 2026, but in the long run the results would be close to the Banguat projection. “The inertia that economic activity brings will make it possible for us to maintain that level of growth,” Cabrera warned.
In any case, next year it is likely that the economy will suffer. There are cost pressures ranging from oil, fertilizers and other inputs, as well as imported goods that can negatively affect the economy, and uncertainty could impact productive investment.
It is very likely that the trend will continue this year, despite the fact that there are many frictions at the international level that can affect us in different ways.
Spross considers that the Monetary Board’s decision to maintain its growth projections in the range of 4% for 2026 and 4.1% for 2027 is a sign of prudent optimism and, at the same time, a sample of the existing structural stability.
“This, if we take into account the traditional resilience of the economy, given the relative “isolation” in the face of global crises thanks to its low public debt and historical macroeconomic stability,” he stressed.
Likewise, he pointed out that the main engine of the economy is domestic consumption, driven by the flow of family remittances, which It is projected to reach a record of US$26.8 billion in 2026, which could compensate for possible weaknesses in external demand.
Remittances will grow, but with brakes
The analysts were asked what the revision to minimum percentage values of family remittances for 2026 and 2027 means, and they agree that They will continue to be an “engine” for the Guatemalan economy.
“It is important to recognize that, if we assume that the “oxygen” of the current model is the growth rate of remittances, it is necessary to maintain monitoring of the United States labor market, since any strong slowdown in American employment would directly affect this growth rate,” Spross mentioned.
Cabrera assured that Remittances are being negatively influenced by factors of the immigration and security policy of the United States, as well as an increase in the cost of living in that country and some signs of economic weakening. “These factors suggest that the volume of remittances may be contained,” he emphasized.
The inertia that economic activity brings will make it possible for us to maintain that level of growth.
In his opinion, in the new forecast the scenario they propose is plausible, that is, always with a growth in remittances, but with a tendency towards moderation. According to the Bank of Guatemala, remittances would grow 5% by 2026 and 3% by 2027, and would maintain private consumption in the economy.
Inflation puts pressure on cost of living
Another of the reviews carried out by the Monetary Board (JM) in April was inflation, which is the general increase in prices in the economy, and which was adjusted to 3.75% for 2026 and 4% for el 2027, so the specialists provided their perspective.
Cabrera highlights that it is about the rising cost of living, the difficulties in covering the family budget and the deterioration of the standard of living.
“Given that Guatemala has a percentage of the population that is socially vulnerable, if this is combined with very pronounced effects of the El Niño phenomenon, this can lead to a deterioration in food security, ranging from a decrease in the quality of families’ diets to food crises in some regions of the country. That is, crises focused on some territories of the country,” he noted.
Imported inflation hits margins
Fundesa researcher, Fernando Spross, points out that, Given that the upward revision of inflation is motivated by international factors, it is assumed that there will be a significant impact on imported inflation.
As for households, any increase in the inflation target impacts the perception of the cost of living, especially in the basic basketsince international factors are usually linked to the prices of fuel and basic grains.
As for companies, there is pressure on profit margins, as they are the first to feel the impact of external factors, such as inputs, energy and logistics, which means that importing raw materials is more expensive. Therefore, companies must decide whether to absorb that cost or transfer it to the consumer’s final price.
Finally, there is a significant impact for the financial sector, given the possibility that interest rates remain at restrictive levels for the rest of the year.
External conflict puts economy on alert
The new macroeconomic scenarios have as premise a possible short-term solution to the international geopolitical conflict.
When asked about the caution that should prevail in the current environment, the Fundesa researcher explained that, if by the end of June the international conflict does not show clear signs of resolution, it is likely that the monetary authorities will make a downward revision of growth and a more severe upward adjustment of the inflation forecast.
“This implies that both companies and the Government must be cautious and have contingency plans for possible scenarios of higher production costs, higher fuel costs and possible tightening of monetary policy, with the possibility of raising the leading interest rate to curb consumption. From the point of view of supply chains, alternatives must be sought to dependence on vulnerable international routes, as this could impact the costs and inventories of importers,” warned Spross.
Conflict could prolong economic effects
In this context, Cabrera maintains that It is very uncertain to assume that the conflict will last two months. In his opinion, this forecast is closer to an optimistic vision, in which the conflict ceases and there are no major blockades in that area of the Persian Gulf, and I hope that scenario occurs, “but it is very difficult to predict what may happen.”
This implies that both companies and the Government must be cautious and have contingency plans for possible scenarios of higher production costs, higher fuel costs and possible tightening of monetary policy.
“Everything indicates that tensions exist and, in the best of cases, a resolution may take a few months longer than those estimated by Banguat. Let’s hope that, at least, the conflict does not escalate. However, even if the conflict ends soon, its economic effects will remain, in terms of increasing the price of energy, logistical costs and upward pressure on food,” he warned.
He recommended that The caution that authorities must take is to anticipate possible scenarios of negative social effects. This means not continuing the trend of eliminating taxes, as it hinders government responses to future crises.
Furthermore, the quality of the responses must improve. For example, a subsidy like the one approved is ineffective and burdensome, since it does not reach those who need it most and involves valuable budget resources.