Guatemala City — For several months now, Guatemalan households have been perceiving a generalized price increase for products and services, according to national statistics bureau INE’s consumer price index (CPI) report, but which does not reflect the increase in the cost of food, and which has a harsh impact on citizens and is a trend that is likely to continue.
For example, a Guatemalan family of five needs $417.38 (around 3,234.62 quetzales) per month to purchase the 34 products needed to consume the recommended 2,500 calories, according to the INE’s May report.
The food price increase from January to May was $16 (Q124), and $37 (Q287.32) for the expanded household basket, which, in addition to food, includes items such as clothing, footwear, recreation, education and transportation expenditure, which totaled $837, equivalent to Q7,468.53.
According to a comparative analysis by Bloomberg Línea, this means Guatemala is among the countries with the costliest basic food baskets in Latin America, followed by Venezuela with $382, and Honduras with $285.56.
Guatemala’s basic food basket increased 8.07% year-on-year in May, up from $388.79, while the generalized price of goods and services increased 5.82%, the lowest inflation in the region.
However, the costs of the basic food basket are not 100% comparable, because in each country types of products and consumption vary, as does the purchasing power afforded by each currency.
Price increases and decreases
Transportation and food items figure highest among May’s inflationary growth by expenditure division, with a variation of 11.51% and 7.22% respectively.
Among the sharpest increases were tomato (11.16%); high-octane gasoline (9.52%); regular gasoline (9.49%); diesel (8.76%); pasta (5.97%); flour (4.53%); margarine (4.08%) and electricity (3.65%, while declines were registered in the prices of apples (down 3.62%); jelly (3.03%); green beans (2.47%); and seafood (2.24% lower).
But on a year-on-year basis, the sharpest increases were for diesel (59.03%); high-octane gasoline (47.92%); and regular gasoline (41.21%).
Higher inflation forecast
Guatemala’s central bank’s monetary policy board has revised upward its estimate for inflation at year’s end, from 4.75% in May to 5.25%, with a margin of error of 1%.
As a comparison Sergio Recinos, president of the Bank of Guatemala and its monetary policy board, pointed to high inflation in other countries, including in the United States, where it is at 8.6%, and, in Central America, is at 10.6% in Nicaragua, 9% in Honduras, 8.8% in Costa Rica, and 7.5% in El Salvador, meaning that Guatemala’s is the lowest in the region.
Recinos has also predicted that the price of crude oil could $135 on the international markets by the end of the year.
According to Carlos Arreaga, vice minister of rural economic development at the Ministry of Agriculture, livestock and food, 4.6 million Guatemalans are now in so-called food insecurity phase III, which means that they do not have the necessary income to supplement their basic food basket.
He also added that, as part of the government’s actions to mitigate rising food prices, 350,000 food rations will be delivered to poor households, as well as a 1,000-quetzal ($129) stipend to 180,000 farmers, while congress members have called for food assistance for at least 14 regions in the country amid the spiraling prices.
Translated from the Spanish by Adam Critchley