March 19, 2018 Print

Since 2012, the National Statistics Institute (INE) of the Guatemalan government has reported substantial inflation of grocery prices in the country. A new study by the Market Trends program at Universidad Francisco Marroquín (UFM) in Guatemala City finds that the INE’s statistics of grocery price increases were significantly flawed.

According to the INE, average food prices in Guatemala were rising by nearly 10 percent per year. By performing their own study of food prices and examining data from the Guatemalan Ministry of Agriculture, UFM Market Trends analysts found that the INE had overestimated annual food price increases by a large margin. INE reported a 25.7 percent increase in prices since 2011; in reality, food prices had increased by only 4.31 percent between 2005 and 2010, and had actually decreased slightly since 2011. An error was discovered in the equation used by INE to determine price increases which had led to the faulty reports.

“We demonstrated that INE´s statistics about poverty were overestimated,” said Dr. Daniel Fernandez, professor of economic sciences at UFM and director of Market Trends. “The official poverty statistics were hard to believe since Guatemala has not suffered a severe economic downturn since 1980s. The income levels are constantly increasing, so the poverty should be decreasing. However, taking in account that INE´s food prices were increasing at 10 percent per year, the income level should have to increase at least 10 percent per year to counterweight increases in prices (this was not the case). If we modified the poverty levels (not modified by INE when they admitted their error) we found that poverty was actually decreasing (following the trend in other Latin American countries). The truth is that Guatemala has the potential to decrease poverty much more rapidly and we are not exploiting this potential, but we are not the only country in Latin America with increasing poverty levels as FAO stated several times.”

Following the publication of the results by Market Trends, a number of widely circulated Guatemalan newspapers, including República, Prensa Libre, and El Periódico, wrote about the results, bringing UFM Market Trend’s findings into a national dialogue. Representatives from Market Trends have appeared on TV programs and radio interviews.

INE has since admitted to the error in its calculations. The results of Market Trends were presented before a commission of the Guatemalan Congress, where a bill is currently being debated to provide better oversight of the INE.