Macroeconomic Forecast Mexico

January 2006 | Macroeconomic Forecasts

Guillermo Ortiz, governor of Mexico’s central bank, Banxico, expects the Mexican economy to grow by 3-3.5% this year. This is a fairly lacklustre projection, following expected 2005 growth of 3.5%. We are forecasting real GDP growth at the upper end of this scale, as we expect the economy to benefit from the stimulatory effect of monetary easing, with the recent rebound of auto production boding well for a better year. Ortiz also forecasts an uptick in consumer price inflation in the early part of the year, although he thinks that core inflation should remain right on target at 3.0% for the year. This follows 2005’s full year outturn, in which CPI came in at a record low of 3.33%, and core stood at 3.12%. We think CPI is likely to hit 3.6% by year-end.

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