(Adds governor's comment on growth)
MEXICO CITY, April 4 Most of Mexico's central
bankers think that a spike in inflation has likely passed, but
fear short-term risks to economic growth could push them to cut
their growth outlook, minutes of the March 31 board meeting
released on Friday showed.
Central Bank board members voted at the meeting to hold
their benchmark interest rate at a record low of
The minutes did not specify if the decision was unanimous or
not, a rare omission for the bank. The central bank later issued
a statement clarifying that the decision was unanimous, 5-0.
Most policymakers said that the risks of higher inflation
had receded marginally, while the majority thought the bank
would have to revise down its current growth outlook of between
3 percent and 4 percent for 2014.
"The majority of board members thought that the balance of
risks to growth had deteriorated, on the margin," the minutes
said, with most board members adding that recent economic
reforms improved the medium-term growth outlook.
Analysts expect the bank will hold borrowing costs steady
this year as the economy recovers from a weak start to 2014.
"The minutes confirm that the economic environment does not
suggest an imminent change in monetary policy," Barclays analyst
Marco Oviedo said in a report. "Growth is the main concern, but
not enough to trigger a reaction."
Most of the policymakers said there was no evidence that
taxes introduced this year were spurring wider price pressures.
Data late last month showed annual inflation fell back below the
bank's 4 percent ceiling in early March.
But some members said taxes could still drive so-called
second round effects on prices, while more global volatility
could hurt the peso and drive up inflation by making imports
Mexico's peso slumped early this year on fears
about less U.S. monetary stimulus and a global sell-off in
emerging markets. But the currency hit a nearly 3-month high on
Friday after solid U.S. jobs data boded well for local exports.
When asked on local radio on Friday if growth could reach 5
percent by the end of President Enrique Pena Nieto's term in
2018, Banco de Mexico Governor Agustin Carstens replied; "My
perspective is yes."
He said stronger growth would depend on Congress approving
solid secondary laws, which will lay out the fine print of a
raft of reforms approved last year.
Carstens said on Thursday that the economy is starting to
grow more quickly, while inflation will head toward 3 percent
over the next 18 months.
Since the March 21 decision, data has shown that factory
exports rose at their fastest pace in more than four years,
while March consumer confidence data jumped.
Analysts cut their estimates for growth this year to 3.09
percent, a poll from the central bank showed on Thursday.
(Reporting by Michael O'Boyle and Luis Rojas with additional
reporting by Jean Arce; Editing by Dan Grebler and Simon