Mexico's central bank, Banco de México raised its 2017 economic expansion forecast range to between 1.5% and 2.5% due to better-than-expected first-quarter GDP growth figures, the bank said in a quarterly report.
The new forecast reflects better expectations for sustained growth and a deceleration in inflation by the end of 2017, the report said. Growth during the first quarter of 2017 has expanded at a level similar to the previous quarter, reflecting continued growth in production and external demand, the bank added.
The central bank, however, expects annual inflation to remain over 4.0% for most of the year.
"The rise in prices of public transportation, fuel and agricultural products as well as other shocks will continue to add pressure on the country's annual inflation rate throughout most of 2017," the authority noted.
Regarding employment, the bank raised its expectations, forecasting that between 650,000 and 740,000 new jobs will be added in the year.
In early March, Banxico had cut its 2017 economic growth forecast for the fourth time, projecting growth to fall between 1.3% and 2.3% mostly on the back of political developments related to the U.S.-Mexico relationship.
For 2018, the central bank maintained its forecast growth range of between 1.7% and 2.7%.