According to the minutes from its latest monetary policy meeting, which were released Dec. 29, Mexico's central bank, Banco de México, expects a slowdown in economic growth in the fourth quarter compared to the previous quarter.
The Mexican economy showed a moderate recovery in the third quarter from the second quarter, driven by exports, manufacturing and private consumption, but key economic indicators show growth has slowed in recent months, the bank noted in its Dec. 15 meeting.
For example, in the period of October to November, sales of new cars fell compared to the previous three quarters, the bank said. In addition, gross fixed investment remained weak in the period of July to September, partly due to lower public spending on construction, Banxico noted.
During the meeting, the bank decided to hike its benchmark interest rate by 50 basis points to 5.75% citing inflationary pressures, the potential impact of U.S. trade policies on the Mexican economy, and the U.S. Fed's decision to raise its benchmark rate.