The increase in the Banxico rate will slow down the economy in 2023, forecasts BBVA

The increase in the Banxico rate will slow down the economy in 2023, forecasts BBVA

The reasons why BBVA estimates greater growth in the economy this year is because of its good performance in the first half of the year. For 2023, a slowdown in domestic demand is expected due to high inflation and restrictive monetary policy.

Carlos Serrano, chief economist at BBVA Mexico, said Thursday that he estimates that inflation will close the year at 7.1% and the Bank of Mexico (Banxico) will take the reference rate to 9.5%, which will “play against” growth in the Mexican economy, especially in consumption and investment.

“We believe that 9.5% is going to be the peak of the monetary policy rate and that the following year, as we see lower inflation and slack conditions in the economy, there could begin to be a gradual start of decreases (in the rate said the economist.

The economist ruled out that the rate reaches levels of 10%, as the market has estimated, because after the third quarter of the year, inflation will begin to subside.

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