Bank of Mexico ups economic growth view, sees inflation taking longer to ease

The Bank of Mexico on Wednesday upwardly revised its forecasts for 2023 and 2024 economic growth and said it now sees headline and core inflation reaching its target in the second quarter 2025, later than previously projected. In its quarterly report, the central bank forecast economic growth of 3.3% for 2023, up from a prior view of 3.0%, and said it sees the economy expanding by 3.0% in 2024, versus a prior projection of 2.1%.

The Bank of Mexico on Wednesday upwardly revised its forecasts for 2023 and 2024 economic growth and said it now sees headline and core inflation reaching its target in the second quarter 2025, later than previously projected.

In its quarterly report, the central bank forecast economic growth of 3.3% for 2023, up from a prior view of 3.0%, and said it sees the economy expanding by 3.0% in 2024, versus a prior projection of 2.1%. Banxico, as the central bank is known, sees annual headline inflation hitting 4.4% in the fourth quarter, a slight downward revision from a 4.6% forecast in its previous report.

The bank, however, revised its forecast for core inflation in the final quarter upwards to 5.3% from 5.1%. The report's publication comes after Banxico unanimously

held its key rate steady at a record-high 11.25% for a fifth straight time at its meeting earlier this month.

In the report, Banxico said that to bring inflation to the bank's 3% target, it would be necessary to hold the benchmark rate at its current level "for some time."

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