The first survey of Citi Mexico economic Expectations (previously made by Citibanamex) projects a 25 point trim based on the interest rate of the Bank of Mexico (banxico) in its December decision.
of the 34 participants, 31 project a reduction, while 3 respondents project a drop of up to 50 points.
The median of the estimates for the interest rate at the end of 2024 remained at 10%.
For the end of 2025, expectations also remain at 8%, with a range from 7.50% to 9%.
Regarding inflation, Citi México estimates in its survey of economic sector specialists that during November it will be 0.49% at a general level and the underlying inflation at 0.07% at a monthly rate,respectively.
For the month of December, the consensus of analysts predicts that general and underlying monthly inflation will be 0.50% and 0.41%, respectively.
Respondents’ median headline annual inflation for year-end 2025 stood at 3.83%, compared to the previous survey at 3.80%, while core inflation stood at 3.70% (unchanged from the previous survey) .
Regarding the exchange rate, private sector specialists revised it to 20.23 pesos per dollar from 20 pesos per dollar in the previous survey.
For the end of 2025, the consensus estimate remained unchanged at 20.50 pesos per dollar, relative to the previous survey.
And in the GDP growth projections, for 2024 the consensus anticipates a growth of 1.6% (previously at 1.5%), while for next year it is indeed estimated at 1.2% (compared to 1% in the previous survey), according to to Citi Mexico.
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Interview: Future Economic Projections for Mexico with Citi Mexico Expert
Editor, Time.news: Thank you for joining us today to discuss the recent findings from the Citi Mexico economic expectations survey. Let’s dive right in. First off, could you elaborate on the projected interest rate adjustments from the Bank of Mexico for December and how these expectations align with the broader economic climate?
Citi Mexico Expert: Absolutely! The survey has shown a consensus among 31 out of 34 participants anticipating a 25 point trim in the interest rate. This aligns with a general sentiment aimed at promoting economic growth amidst ongoing inflation concerns. A few respondents even speculate a more critically important drop of up to 50 points, which indicates that there’s a strong belief in the need for more accommodative monetary policy given the current economic conditions.
Editor: That’s interesting! What are the implications of maintaining a median interest rate at 10% for the end of 2024, and could you explain why that figure is significant?
Citi Mexico Expert: The median interest rate projection of 10% for the end of 2024 suggests that while there’s some easing anticipated, we’re still navigating a high-interest-rate environment. This is crucial for businesses and consumers alike as it affects borrowing costs. A stable interest rate allows for better financial planning for both individuals and businesses, but continued vigilance on inflation is essential.It’s a balancing act between fostering growth and ensuring price stability.
Editor: Speaking of inflation, the survey points to estimates of 0.49% for November and predictions of 0.50% for December.how do these figures compare to previous months, and what might they indicate about the inflation trajectory going forward?
Citi Mexico Expert: indeed, the current estimates for both general and underlying inflation suggest a slight uptick compared to previous rates. This stability in inflation figures, with a median annual inflation expected at 3.83% for the end of 2025, indicates that the economy is facing moderate inflationary pressures. A core inflation rate holding steady at 3.70% suggests that underlying price pressures are contained,which can be a positive indicator for consumers and policymakers.
Editor: let’s talk about the exchange rate. Private sector specialists have revised their expectations to 20.23 pesos per dollar. What does this revision mean for Mexico’s economy, and why has this change occurred?
Citi Mexico Expert: The revision to 20.23 pesos per dollar reflects a cautious expectation about the peso’s performance amid various global economic variables, including commodity prices and foreign investment trends. A stable exchange rate is vital for trade balance and can attract foreign investment, which is essential for sustained economic growth. An unchanged expectation of 20.50 pesos per dollar for the end of 2025 suggests that while the peso is under pressure, there is a level of confidence in its long-term stability.
Editor: Regarding GDP growth projections, there’s optimism for 2024 with an anticipated growth of 1.6%. How do you interpret this positive outlook in the context of the current economic challenges?
Citi Mexico Expert: The expectation of a 1.6% growth rate in 2024, up from 1.5%, signals a recovery momentum within the economy. This slight increase can be attributed to improved consumer confidence and increased investment activities as businesses adjust to the evolving economic landscape. Furthermore, sustaining a growth rate of 1.2% next year reflects a cautious but optimistic outlook, which is vital for addressing employment needs and overall economic stability.
Editor: as we wrap up, what practical advice would you provide to businesses and investors in Mexico in light of these projections?
Citi Mexico expert: My advice would be to focus on agility and adaptability. Given the fluctuating interest rates and economic conditions, businesses should develop flexible financial strategies that can accommodate changes as they arise. For investors, staying informed about currency fluctuations and inflation trends is crucial, as these can significantly impact investment returns. Seeking diverse investment opportunities will also help mitigate risks associated with economic variability.
Editor: Thank you for sharing those insights. This discussion certainly sheds light on the current economic landscape in Mexico and prepares our readers to navigate the evolving market dynamics.