Guatemala: Staff Report for the 2005 Article IV Consultation

IMF Staff Country Reports, October 6, 2005

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Guatemala: Staff Report for the 2005 Article IV Consultation

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Bibliographic details

• Published: October 6, 2005
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781451816655.002

Overview

• Following three years of sluggish economic growth, activity in Guatemala improved somewhat in 2004.
• Real GDP rose by 2¾ percent in 2004.
• Consumer price inflation drifted upward to more than 9 percent in 2004.
• Monetary policy is being geared to reducing inflation to the 4–6 percent range.
• The exchange system is flexible; however, the central bank intervened in the foreign exchange in 2004 to contain the appreciation of the quetzal against the U.S. dollar.
• In January 2005, a rules-based mechanism for interventions was introduced.

Key macroeconomic findings

• Growth: real GDP rose by 2¾ percent in 2004.
• Inflation: consumer price inflation rose to more than 9 percent in 2004.
• Inflation targeting stance: monetary policy aims for inflation of 4–6 percent.
• Exchange regime: described as flexible, with central bank interventions in 2004 to limit quetzal appreciation; a rules-based intervention mechanism began in January 2005.

Policy implications and priorities identified

• Use monetary policy to reduce inflation toward the 4–6 percent range.
• Maintain a flexible exchange system while employing a rules-based intervention mechanism introduced in January 2005 to address excessive exchange rate appreciation pressures.

Source: Guatemala: Staff Report for the 2005 Article IV Consultation, October 6, 2005.

Content in this bundle

• _cr05362 — Executive Summary and Selected Staff Report Extracts
  • _cr05362 — Executive Summary and Selected Staff Report Extracts (Markdown version)
  • _cr05362 — Executive Summary and Selected Staff Report Extracts (PDF)