Guatemala inflation rate drops to 25-year low

GUATEMALA CITY, July 7 Tue Jul 7, 2009 5:00pm EDT

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GUATEMALA CITY, July 7 (Reuters) - Guatemala's inflation rate fell for the eighth straight month in June, plunging to its lowest level in 25 years because of a drop in food prices, the national statistics agency said on Tuesday.

The Guatemalan consumer price index was just 0.62 percent higher than a year earlier, the agency said. That is sharply lower than normal for Guatemala and puts the country close to a state of deflation, which can hammer an economy by leading consumers to put off spending.

Luis Arroyo, director of the agency's consumer price index department, said the fall in the inflation rate was "perhaps due to the economic crisis."

Inflation has trended between 5 and 10 percent in Guatemala since 2000, according to the central bank. (Reporting by Sarah Grainger; Editing by Dan Grebler)

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