Banguat reduces rates in November

Easing cycle continues at last 2025 meeting: On 26 November, the Bank of Guatemala (Banguat) reduced its policy interest rate by a further 25 basis points to 3.75%—the lowest since December 2022—mirroring both September and August’s decisions.

Muted inflation makes room for more cuts: Banguat deemed it had room to cut rates for a third consecutive meeting as available data suggested that economic growth remains on track this year and next, in line with market expectations, and inflation remained below the 3.0–5.0% target. The cut therefore aims to anchor inflation expectations and support the inflation rate’s convergence toward the midpoint of the target range ahead.

Further reductions expected next year: In the absence of forward guidance regarding future decisions, our panelists expect Banguat to resume rate cuts next year, ending 2026 25–50 basis points below current levels. As the Central Bank seeks to minimize the interest rate differential with the U.S., it may wait until after Fed meetings before further easing. Lower-than-expected economic growth in Guatemala, linked to evolving U.S. trade and immigration policy, is a downside risk.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Guatemalan interest rate projections for the next ten years from a panel of 3 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Guatemalan interest rate.

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