The Bank of Mexico lowered its GDP growth forecast to 2.4%

Bank of Mexico (Banxico) On Wednesday, the government cut its gross domestic product (GDP) growth forecast to 2.4%. for 2024, up from a previous forecast of 2.8% amid “weakness in economic activity” that has continued since the end of last year.

In its January-March 2024 Quarterly Report, the central bank pegged its central growth scenario at 2.4%. with a lower limit of 1.9% and an upper limit of 2.9%.

On the other hand, an autonomous body It maintained its central 2025 GDP forecast at 1.5%.

The change in forecast comes after confirmation last week that Mexico’s economy grew 0.3% quarterly and 1.6% annually. in the first quarter of 2024.

Photo: Cuartoscuro Archive

While the Organization for Economic Co-operation and Development (OECD) this month cut its economic growth forecast for Mexico. to 2.2% from 2.5% previously.

“Given continued weakness in economic activity from the last quarter of 2023 to early 2024, “GDP growth in the first quarter of the year was below expectations,” the central bank warned in its report.

Government Council of Banxico He also downgraded his outlook for headline inflation. which will now average 4% per year in the final quarter of 2024, up from the previous forecast of 3.5%.

“Between the fourth quarter of 2023 and the first quarter of 2024, headline annual inflation in Mexico showed some growth. as a result of rising non-core inflation,” he warned.

Photo: Cuartoscuro Archive

In this context, Banxico justified his monetary policy, That May 9 left the interest rate unchanged at 11%, in contrast to the 25-point cut made on March 30, the first adjustment after keeping it at a record 11.25% for nearly a year.

central bank Between 510,000 and 670,000 formal jobs are also projected to be created this year. linked to the Mexican Institute of Social Security (IMSS), below the previous interval, which ranged from 580,000 to 780,000.

You might be interested > Mexico is reporting price increases for more than 50% of the basic basket of products.

The autonomous body concluded in its report that “the Mexican economy is expected to grow.” resume higher growth rates in the coming quarters, supported mainly by domestic expenditures.”


Source: Aristegui Noticias