Analysts consulted by Citibanamex predicted that Banxico will cut its reference interest rate again in its next monetary policy decision, scheduled for November 14 (the penultimate of the year).
The 39 analysis groups surveyed in the financial entity’s most recent biweekly survey agreed that the cut will be 25 basis points, as in the two previous decisions, which would leave the instrument to control inflation at 10.25%.
Estimates for the interest rate at the end of 2024 and 2025 remained unchanged from the previous survey at 10% and 8%, respectively.
On September 26, the central bank cut its key rate to 10.50% and anticipated that the inflationary environment going forward would allow additional adjustments to the instrument.
“It will take into account the prospect that global shocks will continue to fade and the effects of weak economic activity,” he noted in his monetary policy statement.
Lee: Inflation subsides; registers annual rate of 4.66% in the first half of September 2024
The experts consulted by Citibanamex anticipated that the annual rate of general inflation in September, whose data will be released by Inegi on Wednesday, will moderate to 4.62%, from 4.99% in August, while underlying inflation would decelerate marginally to 3.94% , from 4% in August.
They now expect general inflation to close 2024 at 4.44% and not 4.55%, and underlying inflation at 3.80% and not 3.90%.
By the end of 2025, the median expectation for headline inflation increased marginally to 3.81%, from the previous 3.80%, while for core inflation it remained unchanged at 3.70%.
Banxico continues to expect general inflation to converge to the 3% target in the fourth quarter of 2025.
Most expensive dollar
Analysts adjusted upward their estimates for the exchange rate at the end of this year and 2025.
By the end of 2024, they calculated that the dollar will be at 19.67 pesos, from 19.57 in the previous survey, and by the end of 2025 the estimate went from 19.85 to 19.95 pesos per dollar.
Less growth in 2025
Analysts reduced their expectation for the Mexican economy in 2025 by going from an estimate of 1.3% to 1.2%, while for 2024 the forecast remained at 1.5%.
The deputy governor of Banxico Omar Mejía said this Monday that, according to projections, the Mexican economy will practically have a negative output gap by the end of 2024, that is, it will grow below its potential.
“The forecasts indicate that the economy will have a negative product gap practically at the end of the year and this, as we saw in one of the transmission channels of monetary policy, will also influence the price level,” he said at an event.
In its most recent revision of estimates, Banxico adjusted its specific GDP growth expectation for 2024 to 1.5%, from the previous 2.4%, and to 1.2% for 2025, compared to the previous 1.5%.
With information from Francisco Rivera and Reuters
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