The Bank of Mexico (Banxico) predicted that economic weakness will continue in the country, as well as that current pressures will not be sustained, which will help the “disinflation process.”
Some foresee that the weakness of the economic activity prevails, ”said the Government Board of the Central Bank, in a minute released this Thursday, July 10, 2025, in which he added that” one expressed that by 2025 a stagnation or even a slight contraction is anticipated by 2025. “
The document corresponds to the June 26 meeting, when Banxico reduced the interest rate to 8 percent, its eighth consecutive cut and the 50 -point room, before the current inflationary panorama, the degree of monetary restriction and the “atony” of the economic perspectives.
The text is disseminated after being revealed in the previous one that general inflation descended in June 4.32 percent, after four months up and continues above market expectations.
The majority indicated the good behavior of the determinants of medium -term inflation, which suggest that the pressures that are being resented will not be sustained, ”explained the autonomous body.
Among the determinants, they pointed out, are the slack in the economy, the appreciation of the national currency and the anchoring of inflation expectations.
The commercial uncertainty, caused by the imposition of tariffs of the president of the United States, Donald Trump, has caused financial agencies such as Fitch and UBS to forecast a recession in Mexico, whose economy grew 1.5 percent in 2024, but fell 0.6 % from October to December, its first contraction to quarterly rate in the last three years, although it rebounded 0.2 percent in the first 2025 quarter.
In this context, the Governing Board “pointed out that the expected weakness of economic activity and greater slack conditions will contribute to the continuous disinflation process.”
Therefore, the Central Bank anticipated that, taking into account the current inflationary scenario and the prevailing monetary restriction degree, it will assess additional interest cuts.
The Governing Board said that “it will take into account the effects of all the determinants of inflation. The actions that are implemented will be such that the reference rate is consistent, at all times, with the trajectory required to promote the ordered and sustained convergence of the general inflation to the 3 percent target in the planned period.”
This was the fourth decision of the year of the Central Bank, which will announce its next monetary policy on August 7.
With EFE information.
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