Summary
The Central Bank kept its policy rate at 9.25% for the fourth consecutive meeting, a decision reflecting caution amid persistent inflation risks and the ongoing economic recovery.
Key points
Key points:
Four board members voted to hold, two favored a 50-bp cut, and one a 25-bp cut. The majority supported stability given the renewed rise in inflation and higher expectations, reinforcing the Board’s cautious tone.
Headline inflation rose to 5.2% in September and core inflation remained near 4.8%, both above target. Market- and survey-based expectations also stayed above 3% over the two-year horizon. The Governor projected convergence to the 3% target only by 2027, beginning gradually in 2026.
Indicators confirm a continuing recovery, driven by private consumption and investment. The technical staff projects GDP growth of 2.6% in 2025 and 2.9% in 2026, with a slightly negative output gap closing faster than expected.
The trade deficit widened due to stronger imports and weaker energy exports. On the fiscal front, the escape clause was activated, and the government expects Congress to approve a 16-trillion-peso financing law to support fiscal adjustment and the return to the parametric rule.