• HISTORY: The Mexican economy posted an annual inflation rate of 2.83% in 2019, the second lowest number since 1970 according to data from Mexico’s statistics agency (INEGI). During the past five decades Mexico had seen a lower annual inflation rate back in 2015.
• DECEMBER: According to INEGI, inflation in December 2019 was 0.56% mostly attributed to rises in the services sector including among others in the air travel and tourism industries. Analysts expect Mexico to close 2019 with a GDP growth near the 0% mark.
• EASING: Back in December, Mexico’s central bank (Banxico) voted to cut interbank interest rate by a quarter point to 7.25%. This was the fourth cut in a row. Members of the board cited the Mexican peso appreciation due to the signing of the new trade agreement with the US and Canada.
• FUTURE: “We expect inflation to end 2020 at 3.1%. Further deceleration in headline inflation, which has been dragged mainly by a fall in non-core inflation, contributes for Banxico to continue easing its monetary policy, amid weak economic activity”, Julio Ruiz, economist at Itaú BBA bank, wrote.
