The Bank of México (Banxico) has raised its annual inflation forecast for the fourth quarter of 2021 to 6.8%, a figure that would be the highest year-over-year increase in 20 years.

Included in a statement issued Thursday to announce that the central bank’s benchmark interest rate was increasing 25 basis points to 5%, the new prediction is 0.6% higher than the previous fourth quarter one made in September and well above the annual inflation target of 3% give or take a percentage point.

It came two days after the federal statistics agency INEGI reported that inflation last month was 0.84% compared to September, the biggest October hike since 1998.

Banxico said that inflation is rising not just in Mexico but around the world due to production bottlenecks, government stimulus, increases in the prices of food and energy sources and the reopening of some services.

“… Global and internal inflationary pressures continue affecting annual general and underlying inflation, which in October were 6.24% and 5.19%, respectively,” the bank said.

“The general and underlying inflation expectations for 2021 [and] the next 12 months … increased again, while the long term ones remain stable at levels above the target,” it said.

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