Latest news with #KimberleySperrfechter
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.
France 24
30-04-2025
- Business
- France 24
Mexico avoids recession despite tariff uncertainty
Gross domestic product (GDP) grew 0.2 percent from the fourth quarter of 2024, when Latin America's second-largest economy had contracted for the first time in three years, national statistics agency INEGI reported. Year-on-year, GDP rose 0.6 percent in the first quarter, it said in a preliminary estimate. The positive growth means Mexico outpaced the US economy, which data released on Wednesday showed contracted in the first three months of the year. The resilient performance, at least for now, eased fears of a recession, generally defined as two consecutive quarters of economic contraction. "The economy dodged a technical recession last quarter. But growth was driven by a rebound in agriculture and the rest of the economy -- and the manufacturing sector in particular -- continued to struggle," Kimberley Sperrfechter, an economist at the Capital Economics consultancy firm, wrote in a note to clients. "The weakness in industry suggests that US tariffs on Mexico (threatened in February and in force in March) took a toll on the economy last quarter," she added. Trump has announced various tariffs targeting Mexico, as well as several policy U-turns, as part of his global trade war. While he left Mexico off the list of nations facing his steep "reciprocal tariffs," its carmakers as well as steel and aluminum exporters still face duties. Given the uncertain outlook, Mexico's central bank was likely to announce another half-percentage-point cut to its benchmark interest rate in May, Sperrfechter predicted. The International Monetary Fund has predicted that Mexico's economy will shrink by 0.3 percent this year. President Claudia Sheinbaum has said her outlook is more optimistic, because of her efforts to boost the economy and attract foreign investment. Her government has touted a series of major investments pledged by international companies in recent weeks, including e-commerce behemoth Amazon, its regional rival Mercado Libre, streaming giant Netflix and Spain's biggest bank Santander. In theory, Mexico should be protected against US tariffs by a North American free trade agreement that was renegotiated during Trump's first term in office. The United States-Mexico-Canada Agreement (USMCA), which replaced the previous NAFTA accord on July 1, 2020, is due to be reviewed by July next year. Mexico replaced China in 2023 as the largest trading partner with the United States, which buys more than 80 percent of its exports.
Reuters
18-03-2025
- Business
- Reuters
Chile's economy slows in Q4 but full-year growth beats estimates
SANTIAGO, March 18 (Reuters) - Chile's economy slowed in the fourth quarter of 2024 from the previous three months but gained steam compared to a year earlier and full-year growth exceeded official estimates, data released by the central bank showed on Tuesday. The figures were published ahead of a key interest rate-setting meeting on March 21 at which policymakers are widely expected to hold borrowing costs at 5.0%, as they call for caution amid sticky consumer price inflation. The world's largest copper producer saw gross domestic product rise 0.4% in the fourth quarter from the previous three-month period, the bank said, a touch below the 0.5% growth expected by economists in a Reuters poll. GDP growth slowed from the previous quarter's 1.5% expansion as mining activity shrank, but was partly offset by higher services and agricultural activity. "More timely monthly activity data suggest that the economy headed into 2025 with more momentum. This, combined with above-target inflation, means that the central bank is likely to stand pat on Friday," Kimberley Sperrfechter of Capital Economics said. On an annual basis, Chile's economy grew 4.0% in the fourth quarter, beating the Reuters poll forecast of 3.7% growth. Chile last year regained momentum after a weak 2023 on the back of interest rate cuts. The central bank in January paused an easing cycle amid inflationary concerns after delivering a total 625 basis points of cuts since July 2023. In 2024 as a whole, the Chilean economy expanded by 2.6%, boosted mainly by exports, with internal demand growing 1.3%. Full-year growth stood above the 2.3% the central bank had projected in December and marked an acceleration from the previous year's 0.5%, as well as the strongest expansion since the post-pandemic rebound in 2021. Pantheon Macroeconomics' chief Latin America economist Andres Abadia said that Chile ended the year on a solid footing as domestic demand showed resilience, adding that growth might accelerate this year on strong private consumption. "But risks remain tilted to the downside, given volatile external conditions and still-tight financial constraints, with policymakers having little room for maneuver in the near term." Chile's government last month forecast GDP to grow 2.5% this year, while average inflation was estimated at 4.7%, still above the official 2% to 4% target range.
Yahoo
26-02-2025
- Business
- Yahoo
Mexico Inflation Ticks Higher in Line With Banxico Forecasts
(Bloomberg) -- Mexico's annual inflation accelerated roughly in line with economists' forecasts in early February, holding near the central bank's estimates and keeping chances of a sixth straight interest rate cut in play. Trump Targets $128 Billion California High-Speed Rail Project Trump Asserts Power Over NYC, Proclaims 'Long Live the King' Trump to Halt NY Congestion Pricing by Terminating Approval Airbnb Billionaire Offers Pre-Fab Homes for LA Fire Victims NYC's Congestion Pricing Pulls In $48.6 Million in First Month Official data released Monday showed consumer prices rose 3.74% in the first two weeks of the month from the year before, just below the 3.77% median estimate of analysts surveyed by Bloomberg and up from the 3.48% reading in late January. Core inflation, which excludes volatile items such a food and fuel and is closely watched by the central bank, came in at 3.63%, a touch above both the prior reading and median estimate of 3.61%. Banxico, as the central bank is known, delivered a half-point interest rate cut to 9.5% on Feb. 6 as inflation remains in the target range, economic growth slows and the US government delays tariffs on Mexican goods. The bank said that 'looking forward it could continue calibrating the monetary policy stance and consider adjusting it in similar magnitudes.' While services represented one of the biggest inflation drivers in early February, fruits and vegetable prices tumbled 6.25% from a year prior, according to the national statistics institute. The report solidified views from many economists that another half-point cut is on tap at next month's rate-decision meeting. 'Banxico was very dovish at its last meeting,' Kimberley Sperrfechter, an emerging markets economist at Capital Economics, wrote in a research note. 'There's nothing in the mid-month inflation data to change this stance.' Growth Estimates The February half-point rate cut came after four straight quarter-point reductions. Days before the move, US President Donald Trump agreed to delay the 25% tariffs on Mexican exports he'd announced Jan. 31. Yet the threat to the economy remains, hanging over billions of dollars in cross-boarder commerce, discouraging investment in Mexico. Official data published last week showed that Latin America's second-largest economy posted its biggest quarterly contraction since 2021 in the last three months of 2024. Domestic demand and private investment are faltering just as tensions with its top trade partner mount. Banxico cut its 2025 economic growth estimate to 0.6% from the prior forecast of 1.2%, according to its quarterly report presented last week. It indicated slower private consumption and reduced investment can be expected to lead to weaker growth. But the uptick in Mexico's underlying inflation caused concern among some market analysts, who warned the rise could limit the central bank's ability to loosen policy. Rising core inflation means that Banxico will likely have 'a hard time cutting to close or below 8%,' Carlos Capistran, chief economist for Canada and Mexico at Bank of America Securities, wrote in a research note. Following the last rate decision, Banxico said that even if consumer price expectations for the medium and long term remained relatively stable, the balance of risks for inflation remains biased to the upside. 'Announcements of possible changes in economic policy by the new US administration have added uncertainty to the projections,' policymakers wrote in a statement accompanying their decision. The central bank, which targets inflation at 3%, plus or minus one percentage point, holds its next rate-setting meeting on March 27. --With assistance from Rafael Gayol and Robert Jameson. (Updates with inflation details and analysis beginning in fifth paragraph.) Walmart Wants to Be Something for Everyone in a Divided America Why Private Equity Is Eyeing Your Nest Egg Meet Seven of America's Top Personal Finance Influencers Can Dr. Phil's Streaming Makeover Find an Audience in the MAGA Era? How Med Spas Conquered America ©2025 Bloomberg L.P.
Reuters
11-02-2025
- Business
- Reuters
Brazil's inflation slows in January but tightening cycle to continue
SAO PAULO, Feb 11 (Reuters) - Brazil's inflation rate slowed in January from the previous month, data showed on Tuesday, but the 12-month rate was still above the upper end of the central bank's target range, keeping expectations intact for another rate rise next month. In Latin America's largest economy, consumer prices as measured by the benchmark IPCA index rose 0.16% last month, government statistics agency IBGE said, slowing from a 0.52% increase in December and meeting forecasts in a Reuters poll of economists. That was the lowest level of price increases for January since Brazil's real currency was established in 1994, driven by a drop in housing costs as electricity prices fell sharply on the back of credits on household energy bills. Annual inflation stood at 4.56%, decelerating from the 4.83% registered in the previous month. Brazil's central bank targets inflation at 3%, plus or minus 1.5 percentage points, and has been tightening its monetary policy in order to return it to the official goal. Policymakers at the bank unanimously voted in January to raise the benchmark interest rate by 100 basis points for the second straight meeting to 13.25%, and signalled another hike of that size in March. The latest inflation figure "is unlikely to prevent the central bank from delivering another 100bp hike to the Selic rate," Kimberley Sperrfechter of Capital Economics said, noting that inflation expectations remain unanchored. "For now, we think that March's hike will mark the end of the tightening cycle, but the risks to our interest rate forecast lie firmly to the upside." Brazil's government and central bank expect annual inflation to remain above 4.5% at least until June, but Finance Minister Fernando Haddad has said that a bumper crop and recent gains in Brazil's currency should help put it under control soon. The government has been especially worried about high food prices, which affected President Luiz Inacio Lula da Silva's approval ratings. In January, food and beverage costs rose 0.96%, easing from the previous month's 1.18% increase. Inter's chief economist Rafaela Vitoria said that was good news but contrasted with still elevated services inflation, adding that the fresh data did not change expectations of a 100-basis-point rate hike next month. "But from May onwards, with the next steps still to be decided, it will be essential to monitor activity and labour market data," she noted. "A sharper slowdown would be welcome and may help reduce inflation."
