Banxico adjusts its forecast for 2022 upwards – El Financiero

The Bank of Mexico (Banxico) updated its forecast for inflation upwards, as it now estimates that it will close 2022 at 4 percent.

In his previous forecast released in December, the forecast was 3.5 percent.

By quarters, the Central Bank expects inflation to be at 6.9 percent in the January-March period; 5.4 percent between April and May; and 4.6 percent in the July-September period. The figures represent upward updates, since the previous ones were 6.7, 5.1 and 4.3 percent, respectively.

In January, the National Consumer Price Index (INPC) stood at 7.07 percent at an annual rate, its second consecutive month decelerating, according to data from the National Institute of Statistics and Geography (Inegi).

However, the indicator remains well above the target range of the Bank of Mexico, which is 3 percent +/- one percentage point.

The products that most contributed to the rise in inflation were the lemon (68.77 percent); low octane gasoline (1.68 percent); lunch shops, inns, torterías and taquerías (1.61 percent); chicken (4.44 percent); potato and other tubers (15.49 percent) and beef (1.98 percent).

Banxico explains sixth rate increase

The institution argued that the decision to raise the interest rate to 6 percent was made based on the evaluation of “the magnitude and diversity of the shocks that have affected inflation and the factors that determine it; the risk of price formation being contaminated, and the challenges due to the tightening of global monetary and financial conditions”.

The Central Bank added that both internal and external inflationary pressures affected the general and subjacent annual inflation, in addition to the fact that the information on the economy available until October shows a reactivation of the economy.

“An uncertain environment remains and loose conditions are expected, with marked differences between sectors,” he said.

Victoria Rodríguez’s first monetary policy decision as governor of Banxico was not unanimous, since four of the five members of the Governing Board voted for an increase of 50 base points, while deputy governor Gerardo Esquivel proposed an increase of 25 base points .

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