The Bank of Mexico has lowered its growth estimate for this year due to the continuation of the decline in investment and the slowdown in consumption. These two components, investment and consumption, are expected to continue showing some weakness in a context of economic uncertainty.
Consequently, investment is anticipated to be affected by these threats, which could have an impact on the overall economy. Monetary policy is in a scenario of significant moderation and possible economic stagnation, which could contribute to a reduction in inflation in the coming months.
The quarterly report from the Bank of Mexico also focused on updating the macroeconomic scenario, following a negative surprise in GDP from the last quarter. This outlook could limit the response of monetary policy in the future, considering the interest rate differential between Mexico and the United States as a key factor for maintaining the stability of the national currency.
In a context of trade threats and high uncertainty, it is suggested to be cautious when calibrating the monetary policy rate. Despite some signs of improvement in U.S. industrial production after two years of weakness, lower dynamism is expected, especially in investment, which may affect economic growth.
The Bank of Mexico has significantly reduced its growth projections for this year, estimating a GDP increase of 0.6%. The weakness in domestic demand is one of the main reasons behind this forecast, although exports are expected to partially offset this low growth.
On the other hand, the uncertainty generated by U.S. tariff policies, as well as the impact of the depreciation of the national currency, add complexity to the economic landscape of Mexico. Despite these challenges, a possible cut in the interest rate at the next meeting could help stabilize the economic situation, although it carries its own risks and challenges.
