The Bank of Mexico on Thursday said that “disinflation continues to progress” in the country, although it reiterated that it must maintain interest rates at 11.25% for “an extended period”, the highest level in history.
Most members of the Board of Governors “argued that in Mexico the process disinflation followed we are moving towards mitigating the shocks caused by the pandemic and the military conflict” between Russia and Ukraine, according to the Central Bank’s protocol.
Members Banxico They highlighted inflation of 4.79% in July, implying a 3.91 percentage point rate cut from 8.7% in September 2022, “the highest level in this inflationary episode.”
Board of Governors He explained this by improving the functioning of supply chains, reducing costs. raw material prices and evaluation Mexican pesoalbeit also for “comparison purposes”.
Despite this, “everyone agreed that the balance of risks relative to the expected path of inflation over the forecast horizon remains skewed to the upside.”
The minutes correspond to the 10 August meeting, at which the Board, for the third time in a row, kept unchanged interest rate 11.25%the highest level in history, and this decision confirms the end of the bullish period.
The report is published a few hours after publication general inflation since the first half of August, when the rate fell to 4.67%, the lowest level since March 2021.
Banxico maintained its forecast of headline inflation averaging 4.6% per annum in the last quarter of 2023 and reaffirmed its expectations at 3.1% by the end of 2024.
On the other side, Bank of Mexico He stressed that Mexico’s economic activity “showed resilience” after gross domestic product (GDP) growth of 3.7% year on year and 0.9% qoq in the second quarter of the year.
“Most of them noted that, according to the relevant GDP data, the economy showed higher-than-expected growth in the second quarter of the year. One of them added that this would mark the seventh consecutive quarter of expansion, which has not been seen since the end of 2015,” the minutes read.
Next monetary policy decision It will be September 28th.
EFE
Source: Aristegui Noticias
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
