Bank of Mexico Revises Economic Growth and Inflation Forecasts

The Bank of Mexico has updated its economic forecast, increasing growth predictions for 2023 and 2026 while also revising inflation expectations upwards. Despite earlier challenges, the Mexican economy appears stronger than anticipated, prompting the central bank to make these adjustments in its latest quarterly report.

The Bank of Mexico adjusted its predictions for the country's economic and inflation outlooks, projecting stronger growth than previously expected. In its recent quarterly report, the central bank increased its growth forecast for 2023 to 0.6%, up from an earlier 0.1% prediction.

Central Bank Governor Victoria Rodriguez highlighted the more robust-than-expected economic performance in response to past challenges, including weak first-quarter growth and a contraction at the end of 2024. The bank also announced an upward revision for the 2026 growth forecast, now set at 1.1% instead of the prior 0.9%.

Inflation expectations also rose, with the Bank of Mexico adjusting its headline inflation forecast for the fourth quarter to 3.7%, an increase from 3.3%. Nonetheless, the bank anticipates aligning inflation with its 3% target by the third quarter of 2026. A recent interest rate cut to 7.75% reflects the lowest level seen in three years.

(With inputs from agencies.)