MEXICO CITY — Mexico’s central bank will increase its interest rate 25 basis points in March, according to a survey of analysts published by Citibanamex on Tuesday.
Median estimates of the rate for the end of 2022 and 2023 increased to 7.25% and 7.50% respectively, from 7.00% and 7.25% in the first 15 days of February.
The bank’s next monetary policy decision is scheduled for March 24. The expectation that the US Federal Reserve will hike its interest rate soon has limited Mexico’s monetary policy, said Bank of Mexico Deputy Governor Jonathan Heath.
Citibanamex’s survey estimated headline inflation at 7.1% for the first half of February, while underlying inflation, which does not include energy, food or mortgage prices, is set to reach 9.29% for the same period.
Headline inflation expectations for the end of 2022 amounted to 4.50%, up from the 4.40% estimated 15 days before.
GDP growth expectations for 2022 declined to 2.1% from 2.2%, the fourth consecutive drop in the estimate for the year.
The growth expectation for 2023 remained at 2.1%.
Economic growth in Mexico is expected to return to pre-pandemic levels by the third quarter this year due to the rise in exports and consumption, said the Organization for Economic Cooperation and Development (OECD) on Monday. (Reporting by Diego Ore and Valentine Hilaire in Mexico City Editing by Matthew Lewis)