Mexican central bank Governor Agustin Carstens said the country’s economic recovery isn’t causing inflationary pressures.
Growth in Latin America’s second-largest economy has yet to reach its potential as the unemployment rate remains above levels reached before the global financial crisis and the recovery in private investment is slow, Carstens said. Inflation will continue slowing toward the 3 percent midpoint of the central bank’s target range, he said.
“The Mexican economy still has enough slack to grow as it has been without generating inflationary pressures,” Carstens said at a banking convention in Acapulco, Mexico.
A Mexican central bank release today showed that consumer prices rose less than economists forecast in March as fruit and vegetable costs fell. The annual rate slowed to 3.04 percent, the lowest in almost five years.
The annual inflation rate decelerated to within the central bank’s target range of 2 percent to 4 percent and remained within that band through the first quarter.
Policy makers will keep borrowing costs unchanged until January 2012, when they will raise the benchmark rate to 4.75 percent, according to a survey of economists released March 7 by Citigroup Inc.’s Banamex unit.