Inflation is one of the main factors of uncertainty. It may not have reached its peak yet

The high levels of inflation recorded in recent months have become one of the main drivers of uncertainty, and in Mexico, it may not yet have reached its peak, according to some members of the Mexican Institute of Financial Managers (IMEF).

In a video press conference, Alejandro Hernández Bringas, head of the International Monetary Fund, noted that global inflation has taken the spotlight, as central banks have had to tighten their monetary policy, as happened last week with the Federal Reserve (Fed). United State.

“Inflation has shown an unexpected recovery in Mexico and in various parts of the world, which has led to a marked change in monetary policy expectations and is one of the main factors of uncertainty about the outlook, because if it does not slow down relatively, the speed will stimulate more rigidity on the part of central banks ‘, Hernandez Bringas told the media.

In this sense, he noted that inflation in Mexico is one of the main threats to the economy, and highlighted the increases of more than 10% provided by the food and beverage category, the high prices of which, to a greater extent, affect those. low-income people in the country.

Mario Correa, head of IMEF’s National Commission for Economic Studies, noted that the peak level of inflation in Mexico may not have been reached yet, so it is too early to “sing victory”.

In the estimation I have as an independent analyst, I believe the peak will occur until August. In the first two weeks of June we’ll see if there is any significant impact on the increase in public transportation in CDMX, so I think we still can’t claim victory over the fact that we’ve already hit peak inflation in Mexico and I wouldn’t say that nor in the states United. United State “.

Changes in outlook

In June, the IMEF revised the estimate of GDP growth slightly, while for inflation, it maintained the previous month’s forecast, unlike in recent weeks with other organizations that revised the decline in GDP and increased their expectations about prices.

In this way, they expect the Mexican economy to grow at a rate of 1.8% this year, from 1.7% they had previously estimated, while maintaining the level at 6.8% for inflation.

Regarding the interest rate of the Bank of Mexico (Banxico) for the end of this year, the IMEF forecast a level of 8.75% versus the previous forecast of 8.50%. This is due to the 75 basis points hike in the Federal Reserve that occurred last week, a move also expected this week at the Bancico meeting.

“It will be particularly important if some members of the Board believe that an increase greater than 75 basis points is necessary, and also it will be interesting to see if some members believe that increases to the levels of 75 basis points are not long enough. “I have The impression is that they will go in parallel with the Federal Reserve.”

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