The interest rate of Bank of Mexico not only shaping up to climb at the February meetingbut in the following months it might be cut, according to the Mexican Institute of Finance Executives (IMEF).
In the January survey carried out by the institute among 40 analysts, expectations indicate that the benchmark of the Banxico will close 2023 at 10.25 percent.
Currently, the interest rate of the Central Bank is located at 10.50 percent, and for the February meeting the market expects an increase of 25 basis pointsso it would reach 10.75 percent.
“The members of the survey increased their projection of the monetary policy rate of the Bank of Mexico for the end of 2023, placing it at 10.25%. The previous month it was at 10 percent”, indicates the IMEF.
Apart from the February meeting, Banxico has scheduled seven meetings throughout 2023, in which possible cuts would take place so that it reaches 10.25 percent as anticipated by analysts consulted by the Institute chaired by José Domingo Figueroa.
How much will Mexico’s economy grow?
About GDPthe expectation remained for the second month in a row at 1.2 percent growth, and inflation at 5.1 percent, likewise unchanged from the previous survey.
Faced with a slowdown in the economy, from the IMEF they see that the creation of formal employment closes in 409 thousand jobs registered before the IMSSless than the expectation of 418 thousand that was had.
On the other hand, the institute hopes that the weight (or should we say ‘overweight’) is trading at 20.6 units per dollar, lower than the 20.8 units per dollar in the December survey.
Forecasts for the public balance, as a percentage of GDP, stood at -3.7 percent, and those for the current account at -0.9 percent, unchanged from previous estimates.
“The results of this survey do not reflect probable risks for the Mexican economy, derived from possible sanctions for breach of agreements within the framework of the T-MEC”, said the IMEF.
In 2024, GDP growth will be 2 percent and inflation will slow to 4 percent, according to forecasts, while Banxico’s interest rate might reach 8 percent.
