Bank of Mexico Adjusts Inflation Forecast for 2024

The Bank of Mexico has revised its 2024 inflation forecast to 4.0% from 3.5%, according to its latest quarterly report. Core inflation is also expected to rise to 3.8%. The bank aims to achieve a 3% headline inflation target by Q4 2025. The interest rate remains at 11.00%.

The Bank of Mexico upwardly revised its forecast for 2024 inflation to 4.0%, up from a previous forecast of 3.5%, according to the central bank's quarterly report released on Wednesday.

Banxico, as the central bank is known, also raised its forecast for core inflation, often seen as a better indicator of price trends, to 3.8% from 3.5% in its previous report. "The disinflationary process is expected to continue in the coming months," Banxico said, adding that headline inflation is expected to converge to its 3% target, plus or minus one percentage point, in the fourth quarter 2025. That is two quarters later than forecast in its prior quarterly report.

Annual headline inflation in Latin America's second-largest economy stood at 4.78% in the first 15 days of May

. Banxico said that it's five-member "governing board will closely monitor inflationary pressures ... going forward, it will assess the inflation outlook to discuss adjustments to the reference rate."

Banxico held its benchmark interest rate at 11.00% in a unanimous decision announced on May 9.

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