MEXICO CITY, July 17 (Xinhua) -- The Citibanamex Financial Group on Tuesday raised its inflation forecast for Mexico at the close of 2018 to 4.2 percent from 4.0 percent, due to additional pressures on agricultural prices.
The new forecast is above the 3 percent target set by Mexico's central bank Banxico.
On top of agriculture prices, Citibanamex said in a client report that "the monthly rate of upward adjustment in local gasoline prices seems to have increased in July."
"We think that this new rhythm in gasoline prices will continue in the next few months," added the group.
Citibanamex predicted that inflation in Mexico would reach a peak of 4.7 percent in July before gradually decreasing for the rest of the year.
According to the latest data from the National Institute of Statistic and Geography, Mexico's year-on-year inflation jumped to 4.65 percent in June, its highest level in the year and its first rise after five months of falling.
On June 21, the Banxico board unanimously agreed to raise the interest reference rate to 7.75 percent from 7.50 percent, due to the deteriorating outlook for national inflation.
Banxico said that among the principal risks of the inflation rate was that the peso could continue to feel pressure in an environment of higher interest rates and a strengthened dollar.
The central bank also referred to the uncertainty associated with the renegotiation of the North American Free Trade Agreement (NAFTA) and Mexico's July 1 presidential elections.
