MNI BRIEF: Inflation Taking Longer To Ease - Banxico Minutes
Most members of the board stated in the minutes of the last meeting that services inflation is likely to be more persistent.
The Central Bank of Mexico's board believes inflationary shocks will take longer to dissipate, which is why they have revised upward forecasts for headline and core inflation, minutes of the last monetary policy meeting released Thursday showed. Most members stated that services inflation is likely to be more persistent.
"Among upward risks, the majority mentioned the persistence of core inflation, specifically its services component," the minutes said, adding that a reactivation of economic activity is expected for the second and third quarters of the year. "One member commented that the economic boost typically observed in election years seems to be materializing with a certain lag, and thus the spillover effects of increased public spending during these episodes."
Banxico decided unanimously to maintain its interest rate at 11% this month, after a 25 basis point cut in March, and said that the board might discuss "adjustments" in the next meetings according to the inflationary environment. (See MNI INTERVIEW: Banxico Should Have Begun Easing In '23-Werner)