Mexico Consumer Prices Rise More Than Expected in Early July

07/22/16 Bloomberg

Share market prices shown on anMexico’s consumer prices rose more than expected in early July, lifting the annual inflation rate toward the central bank’s long-term target.

Prices rose 0.28 percent from two weeks earlier, the national statistics institute said on its website Friday. The median forecast of 24 analysts surveyed by Bloomberg was for a 0.24 percent increase. From a year earlier, prices increased 2.72 percent, compared with 2.53 percent at the end of June. Banco de Mexico targets inflation of 3 percent.

 

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Mexico’s star wanes as reforms underwhelm, Brazil rises

07/13/16 Reuters

Flag-Pins-Mexico-BrazilForeign investors in Latin America are warming to Brazil as a promising turnaround bet while souring on Mexico and its landmark energy reform that has yet to deliver.

Brazil has yet to recover from its worst recession in decades, inflation and interest rates remain among the highest in the region and it is saddled with a bloated public sector. In contrast, Mexico’s economy is growing at around 2 percent, has lower fiscal deficits and sounder public finances.

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Bank of Mexico Chief: Recent Big Rate Moves Don’t Set Precedent

07/08/16 The Wall Street Journal

380px-Agustin_CarstensMEXICO CITY—The Bank of Mexico’s decision to raise interest rates last month by half a percentage point doesn’t mean that the central bank will always move rates by that much, nor has it abandoned its focus on controlling inflation to one of managing the peso exchange rate, Gov. Agustín Carstens said Friday.

The central bank surprised investors on June 30 by raising interest rates by a half point, beating expectations and matching a similar increase in February. That prompted speculation that this aggressive stance could become the norm in coming months to support a weak and volatile peso.

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Mexico’s Consumer Prices Increased Less Than Expected in June

Bloomberg 07/07/16 

Mexico’s consumer prices rose less than expected in June, keeping the annual inflation rate below the central bank’s target.

Prices rose 0.11 percent from the month before, the national statistics institute said on its website Thursday. The median forecast of 24 analysts surveyed by Bloomberg was for a 0.16 percent increase. From a year earlier, prices increased 2.54 percent, compared with 2.6 percent in May. Banco de Mexico targets inflation of 3 percent.

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Mexico’s Special Economic Zones: White Elephants?

By Viridiana Rios, Global Fellow, Mexico Institute

expert I (2)In June 2016, Mexico enacted a federal law to create Special Economic Zones (SEZ) in four of the poorest regions of the country. The initiative aims to reduce the markedly unequal levels of economic development inside Mexico, with a set of wealthy, internationally connected northern states, and an agricultural south that seems mired in perpetual underdevelopment.

Mexico will create its first Mexican SEZ in the Pacific port of Lázaro Cárdenas, on the border of the states of Michoacán and Guerrero, and the other three will follow at the Isthmus of Tehuantepec (Veracruz and Oaxaca states), Puerto Chiapas (Chiapas), and the Coatzacoalcos Corridor /Ciudad del Carmen (Campeche). The goal is to have at least one “anchor firm” operating in each SEZ by 2018, the last year of the current administration.

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Mexico’s bank chief faces Brexit fallout

Financial Times 07/05/16

agustin_carstensMexico’s central bank governor Agustín Carstens expects his country can maintain its 2.4-2.5 per cent growth rate in 2016, in spite of economic headwinds and Brexit-related fallout.

Matching last year’s growth of 2.5 per cent will not be easy for a country battling a battered peso and inflationary pressures that last week prompted a surprise half-point rate rise.

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Mexico Raises Key Rate More Than Expected After Brexit Vote

06/30/16 Bloomberg

Mexican pesoMexico broke with the Federal Reserve and raised its key interest rate by a half-point after the peso tumbled to a record low following the U.K.’s vote to leave the European Union. The peso rallied, leading gains among major currencies.

Banco de Mexico increased the overnight rate a half-point to 4.25 percent Thursday, saying that the inflation outlook deteriorated and that a worsened global economic condition could impact prices.

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