LatinNews Daily - 01 June 2023

*Mexico’s central bank (Banxico) has released its quarterly report for first quarter of the year, raising its 2023 GDP growth forecast to 2.3%, up from 1.6% in its previous (March) report. Banxico noted that Mexico’s economic growth in the first quarter of 2023 (of 1% as compared with the previous quarter) was higher than it had anticipated in its previous report, “reflecting the resilience of the Mexican economy”. In the report, Banxico forecast inflation to stand at 4.7% at the end of 2023, a light reduction on the 4.9% predicted in its previous report. The bank does not forecast inflation to reach the target level of 3% until the end of 2024.  “To achieve orderly and sustained convergence of headline inflation to the 3% target, the bank’s governing board considers that it will be necessary to maintain the benchmark rate at its current level for a prolonged period,” reads the report. Banxico announced it was holding the benchmark interest rate at 11.25% on 18 May, breaking a rate-hiking cycle of almost two years.

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