How many interest rate hikes will Banxico make in 2023?

“Part of what is sought with these increases in rates is to give confidence that the Bank is very committed, and achieve the anchoring of expectations. Otherwise, it becomes more complicated in the future to control inflation,” said Alejandrina Salcedo, general director of research at Banco de México (Banxico), during her participation in the Economic Outlook 2023 seminar, organized by ITAM.

He added that Banxico has given signs that it is still necessary to increase the reference interest rate.

In this sense, commented Alonso Cervera, chief economist for Latin America at Credit Suisse, estimated that Banco de México will bring the interest rate to 11%.

According to the manager, from the August meeting of the Governing Board there will be drops of 25 basis points to close the year with a reference rate of 10%.

According to Ernesto Revilla, Citigroup’s chief economist for Latin America, there will be a rise of more than 25 basis points in Banco de México.

The big question is, Revilla pointed out, “If those cuts that are ahead are going to be able to happen or not? And if inflation is going to go down to a level where central banks are more comfortable?”

For the Citigroup executive this year will be uncertain as far as the fulfillment of the economic perspectives is concerned.

As far as inflation is concerned, Citigroup and Credit Suisse economists agree that the indicator will close 2023 around 5%.

Cervera sees the consumer price index at 5.3% at the end of 2023, while Revilla said that Mexico will end the year with inflation at 4.8%.

Regarding economic growth, in Banxico they see GDP growth of 2.8% for this year; Citigroup estimates economic growth of 1.4% and Crédito Suisse 1%.