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Mexico Expects 3% Inflation

Mexico Expects  3% InflationMexico Expects  3% Inflation

Mexico’s central bank expects the inflation rate to rise to around 3% in 2016, up from a projected year-end rate of 2% in 2015, Fox News reported. “In 2016, as the favorable supply shocks that occurred in 2015 fade and taking into account the shift in relative prices stemming from the exchange rate depreciation, a gradual increase (in prices) is expected until a level close to 3% is reached,” the Bank of Mexico said. The bank’s board of governors projected at its Dec. 17 meeting that both headline inflation and core inflation, which excludes volatile food and energy prices, would finish the year at close to 2% “due to the absence of price pressure from aggregate demand,” according to the minutes published Thursday. The central bank also is forecasting that year-end inflation in 2017 will come in at around 3%. The previous forecasts are subject to upside risks, including the possibility that Mexico’s currency may experience a greater depreciation relative to the dollar as a result of a new deterioration in global financial market conditions, it added.

 

Financialtribune.com