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mexico. The financial group Santander announced Monday to have lowered its forecast of economic growth in Mexico in 2019, which rose from 2.3% previously to 1.8%.
The financial institution, however, has maintained its estimate of GDP growth of 2.1% for this year, according to a report to its clients.
The Mexican entity of the Spanish bank also anticipated that the Central Bank of Mexico (Banxico) could raise its key rate before the end of the year due to recent losses of the Mexican currency against the dollar .
"We estimate that the depreciation of the peso will cause Banxico to react with an increase of 25 basis points in November, in our opinion," said the entity.
With regard to inflation forecasts, the financial group expects levels of 4.6% and 4% by the end of 2018 and 2019, respectively. Banxico has a permanent inflation target of 3%
Thus, the target rate would be 8% by the end of 2018, a level that would remain even until the end of next year, according to Santander.
The Mexican peso, which has entered a new period of volatility in recent days, would end the year at 19.8 units per dollar and 19.5 units in 2019.
With regard to inflation forecasts, the financial group expects levels of 4.6% and 4% by the end of 2018 and 2019, respectively.
Banxico has set a permanent inflation target of 3%, with a differential of one percentage point.
According to the most recent official data, the rate of inflation in Mexico stood at 4.94% until the first half of October at the interannual rate.
The price index finished 2017 year at 6.77%, its highest level in more than 16 years.
So far this year, Banxico has raised the target rate level twice to try to contain inflationary pressures, in the midst of a period of weak economic expansion.
In 2017, Mexico's GDP grew by 2%. Its economy, the second largest in Latin America after Brazil, depends to a large extent on the production cycle of the United States, which is its main trading partner.
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