The Bank of Mexico (Banxico) considered the persistence of high levels of inflation in the country “worrying”, in particular of the underlying, which reached a level of 8.45% in January, as revealed on Thursday by a minute of its Governing Board.
“Everyone considered it worrying that core inflation continues at high levels and maintains a greater persistence than expected”
“Everyone considered it worrying that underlying inflation continues at high levels and maintains a greater persistence than expected,” the central bank’s text indicated.
The members of Banxico agreed that there is “a process of disinflation slower than expected”Therefore, “headline and core inflation forecasts were adjusted upwards for the entire horizon.”
This minute contrasts with the one published on January 5, when the Governing Board “the decrease in short-term inflation expectations stood out.”
On the other hand, the members of the autonomous bank now recognized that the rise in the forecasts responds to the “persistence of inflation and greater pressure than anticipated in food merchandise and services.”
“Everyone stressed that the balance of risks for inflation remains biased upwards”warned the text.
The report corresponds to the meeting of February 9, when the Governing Board raised the interest rate by 50 basis points to 11%the highest level in its history, which represents the fourteenth consecutive increase in the face of the highest inflation levels in two decades.
In the session, Banxico forecast headline inflation to average 4.9% annually in the last quarter of 2023 after the previous expectation of 4.2 percent.
Hours before the minute was released, the National Institute of Statistics and Geography (Inegi) reported that general inflation fell in the first half of February to 7.76% per year.
JM
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