Mexico's GDP, inflation figures support bets of September rate cut
Recasts story, adds comments from analysts
Mexico inflation undershoots forecasts in early August
Economic growth was tepid in second quarter
Central bank cut interest rates 25 basis points in early August
Analysts see higher chances of new rate cut in September
By Gabriel Araujo
Aug 22 (Reuters) -Mexico's statistics agency INEGI released on Thursday a series of data showingthat inflation slowed more than expected while growth remained tepid, openingthe door for the country's central bank to deliver a new interest rate cut next month.
The Bank of Mexico (Banxico) lowered its benchmark interest rate to 10.75% from 11% in a split vote in early August, despite higher forecasts for year-end headline inflation, and reinforced its view on Thursday that further policy adjustments were on the table.
Another rate cut when policymakers meet again on Sept. 26 is now seen as more likely, especially after INEGIreported that annual inflation undershot market forecasts in its mid-August print, easing more than expected.
In Latin America's second-largest economy, 12-month headline inflation came in at 5.16% in the first half of August, down from the 5.61% registered a month earlier and below the 5.31% forecast by economists polled by Reuters. That is still well above the bank's 3% inflation target, plus or minus 1 percentage point.
The closely monitored core consumer price index - seen as a better gauge of price trends because it strips out volatile energy and food prices - continued to ease, with the annual reading falling below 4% for the first time since early 2021.
"Was Mexico's August rate cut justified? Below-consensus bi-weekly headline and core CPI say 'yes'," VanEck's chief emerging markets economist Natalia Gurushina said.
"However, further disinflation and sizable fiscal consolidation are key to avoid the perception of running ahead of the curve."
Two members of Banxico's five-person board spoke out against the recent rate cut, saying the move undermines the central bank's credibility as the bank upped its forecast for year-end headline inflation to 4.4%, from 4.0% previously.
But if the moderation in consumer prices is confirmed in the second half of August, analysts at CIBanco said in a note to clients, the possibility of a new cut by Banxico at its next meeting increases.
TEPID GROWTH
Soft economic activity might lend some additional support to the board's more dovish members.
INEGI data on Thursday showed that Mexico's gross domestic product (GDP) expanded 0.2% in the second quarter from the previous three-month period, in line with market expectations but reinforcing a slowdown trend seen since late last year.
In annual terms, growth in the April-June quarter sat at 2.1%, while economists polled by Reuters and a preliminary estimate released by INEGI last month had pointed to a 2.2% expansion.
Banorte economists said the Mexican economy faces "relevant challenges" in the second half of the year. Some bright spots might emerge, they added, but acknowledged there were downside risks to their own 1.9% annual GDP growth forecast.
Economic activity in June, INEGI added in a separate report, was unchanged from the previous month and dropped 0.6% on a yearly basis - both below consensus.
"The August mid-month CPI print, alongside the weak activity data for June and the Fed's confirmation that it will kick off its loosening cycle next month means that we expect Banxico to lower its policy rate by another 25 basis points in September," Capital Economics economist Kimberley Sperrfechter said.
Reporting by Gabriel Araujo, Natalia Siniawski, Ricardo Figueroa and Luana Maria Benedito; Editing by Anthony Esposito and Diane Craft
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.