Analysts improve GDP forecast but predict higher inflation

Analysts warn public insecurity, domestic political uncertainty and inflationary pressures will prevent the economy from further progress
Leonor Flores/EL UNIVERSAL
01/06/2017
13:04
Leonor Flores
Mexico City
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Analysts consulted by Banco de México (Banxico) have improved their forecast for growth and raised their estimate for inflation while warning that public insecurity, domestic political uncertainty and inflationary pressures will prevent the economy from further progress.

Influenced by the optimism derived from the official data on the behavior of the economy in the first quarter, the board of analysts raised its forecast for growth this year from 1.70% to 2%. They also left their estimate for 2018 at 2.20% As in the previous survey.

They warned that the advance in the economy, will not be reflected in the creation of jobs, as specialists consulted by the central bank maintained their estimated 650 thousand jobs registered before the Mexican Social Security Institute IMSS for 2017.

However, they raised their expectations for inflation by the end of 2017 from 5.70% to 5.90%, and from 3.70% to 3.84% for the following year.

Consequently, they are seeing that monetary policy will be restrictive since the consensus is anticipating that the funding rate will end the year at 7.25% from the 7% they saw a month ago; for 2018 will increase from 7.20% to 7.25%.

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