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The Bank of Mexico affirms that the country is in “disinflation”

The Bank of Mexico affirms that the country is in “disinflation”

The Bank of Mexico affirms that the country is in “disinflation”

He Bank of Mexico (Banxico) affirms that the country has begun a stage of “disinflation”, although it acknowledges that an “uncertain and complex” panorama persists, according to a report from its Governing Board.

the central bank “He considered that a phase of disinflation has been entered due to the fact that various pressures have been mitigated. However, he judged that these continue to affect inflation, which remains high, and that the inflationary panorama continues to be very complex ”.

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Despite acknowledging the decline in inflation, the members of the autonomous body agreed that “the balance of risks with respect to the path expected for inflation in the forecast horizon remains biased upwards”.

The minutes correspond to the meeting of May 18, when the Governing Board it kept the interest rate unchanged at a record 11.25%, breaking with 15 consecutive increases in the face of general inflation, which fell in April to 6.25%, its lowest level since October 2021.

The members anticipated the end of the upward cycle of interest rates, but qualified “that it will be necessary to maintain the reference rate at its current level for an extended period”.

“It is prudent to communicate that a restrictive monetary stance will be maintained for as long as necessary to guarantee the convergence of inflation to the target”warned one of the unidentified members.

in session, Banxico He now forecast headline inflation to average 4.7% a year in the last quarter of 2023 after the previous expectation of 4.8%.

While for the end of 2024 it maintained the expectation at 3.1%, close to its goal of a rate of 3%.

Despite the decrease, the Governing Board “estimates that the inflation outlook will be complicated and uncertain throughout the entire forecast horizon, with upside risks”.

On the Mexican economy, the central bank highlighted the “higher than anticipated” growth of the gross domestic product (GDP) of Mexicowhich was up 3.7% yoy and 1% qoq.

“The majority considered that in the face of a complex external environment, the Mexican economy has shown resilience”highlighted the minute.

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Source: Elcomercio

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