Latest news with #BankofMexico
Wall Street Journal
28-05-2025
- Business
- Wall Street Journal
Bank of Mexico Cuts Economic Growth Forecasts
MEXICO CITY–The Bank of Mexico lowered its economic growth estimates for this year and next, citing uncertainty about the impact of U.S. import tariffs and weakness in domestic consumption and investment. In its quarterly report, the central bank said it expects Mexico's gross domestic product to grow 0.1% this year, down from it's previous estimate of 0.6%. The forecast ranges from a contraction of 0.5% to an expansion of 0.7%. For 2026, the bank cut its growth forecast to 0.9% from 1.8% previously.
Reuters
22-05-2025
- Business
- Reuters
Mexico inflation rises past central bank target in early May
MEXICO CITY, May 22 (Reuters) - Mexico's headline inflation rose more than expected in the first half of May, data from the national statistics agency showed on Thursday, jumping outside the central bank's target range for the first time this year. Consumer prices rose 0.09% in the first 15 days of the month from the previous half-month period, bringing the annual rate through the month's first half to 4.22%. Analysts polled by Reuters had forecast an annual rate of 4.01%. The Bank of Mexico, which targets an inflation rate of 3%, plus or minus one percentage point, cut its benchmark interest rate by 50 basis points last week — its third straight cut of that magnitude — bringing it to 8.5%, the lowest since August 2022. The closely watched core price index (MXCPIH=ECI), opens new tab, which strips out some volatile food and energy prices, climbed 0.16% in early May. Capital Economics' Kimberley Sperrfechter said the rise in headline inflation is "unlikely to sway the central bank's thinking, and expects a rate cut at the bank's June meeting given the weak state of Mexico's economy. Banco BASE, meanwhile, said in an analysis note that it would be "prudent" for the Bank of Mexico pause its rate-cutting cycle, noting that annual core inflation rose to its highest level since August 2024. "This is a cause for concern, as the core component determines the trajectory of headline inflation over the medium and long term, and its recent upward trend suggests that the Bank of Mexico has not yet achieved sustained inflation convergence to the 3% target," Banco BASE said.
Reuters
07-05-2025
- Business
- Reuters
Mexico central bank still has room to lower benchmark rate, Heath says
MEXICO CITY, May 7 (Reuters) - There is still room for Mexico's central bank to lower its benchmark interest rate, deputy governor Jonathan Heath said in a podcast with lender Banorte published on Wednesday. Last month, the Bank of Mexico cut its interest rate 50 basis points to 9% in a unanimous decision, while its board also warned of uncertainty linked to trade tensions worldwide. Heath added that it was highly likely that the monetary authority would continue lowering the rate, while maintaining caution amid an uncertain economic scenario. Speaking about the current economic uncertainty linked to tariffs imposed by the U.S. government, Heath noted that "in the face of all these risks, we are still underpinning a restrictive monetary stance, but less and less restrictive than we had previously anticipated." He added that all scenarios considered by the central bank expected a slowdown in Mexico's economy, as well as in the United States.
Reuters
22-04-2025
- Business
- Reuters
Mexico's annual inflation seen slowing in the first half of April
MEXICO CITY, April 22 (Reuters) - Mexico's annual inflation likely slowed in the first half of April, a Reuters poll on Tuesday showed, supporting chances that the central bank will again cut its key rate by half a percentage point in May. The median estimate from 10 participants showed an annual headline inflation rate of 3.89% in the month's first half, down from 3.93% in the second half of March. (MXCPHI=ECI), opens new tab Annual core inflation, considered a better measure of price trends because it excludes highly volatile products such as food and energy, is seen at 3.78%. (MXCPIC=ECI), opens new tab Prices are expected to have risen 0.09% from the previous two weeks, while the core index is expected to have increased 0.21%, according to the survey. Official data will be released on Thursday. (MXCPIF=ECI), opens new tab, (MXCPIH=ECI), opens new tab The Bank of Mexico, which has an inflation target of 3% plus or minus one percentage point, cut its benchmark interest rate by 50 basis points last month, its second consecutive reduction of that magnitude, and said it may consider similar cuts going forward if the inflation environment allows. The bank's next rate announcement is scheduled for May 15, opens new tab, and although economic growth does not fall under its mandate, analysts believe the weak outlook stemming from global trade tensions may add to the argument for continuing the monetary easing cycle.
Reuters
10-04-2025
- Business
- Reuters
Bank of Mexico: U.S. tariffs may exert pressure on both ends of inflation
MEXICO CITY, April 10 (Reuters) - Most of the Bank of Mexico's five governing board members agreed that the risks associated with U.S. President Donald Trump's tariffs will exert both upward and downward pressures on Mexican inflation. "They pointed out that, on the one hand, there is a greater possibility of a further exchange rate depreciation and, on the other, a greater risk of a further economic weakening," said the Mexican central bank on Thursday in minutes of its last monetary policy meeting. Banxico, as the bank is known, delivered a unanimous 50-basis-point interest rate cut to 9.00% on March 27, highlighting progress on inflation but warning of heightened uncertainty relating to trade tensions and a weakening economy. Some board members mentioned that weakness in the Mexican economic activity "is expected to have deepened in the first quarter of 2025," said the minutes. A first-quarter contraction would mark a technical recession, after the economy shrunk in the fourth quarter - its first quarterly contraction since the pandemic. One board member underscored that the effects of the uncertainty resulting from U.S. tariffs were already reflected in an additional weakening of the Mexican economy, according to the minutes.
