Although inflation in the country shows a downward trend, long-term risks from geopolitical conflicts and the health crisis prevail, warned members of the Bank of Mexico (Banxico).
“Given the economic effects of this health problem, merchandise inflation increased before services inflation and now, in the disinflation stage, merchandise inflation has decreased faster,” the institution explained.
In the minutes of their latest monetary policy decision, the majority of members of Banxico’s Governing Board warned of the possibility of greater cost pressures of various kinds.
Some highlighted the risk that an escalation of geopolitical conflicts will lead to further increases in transportation costs, as well as upward pressures on energy prices.
In addition, another member added the possibility that climatic, geopolitical and macro-financial factors generate shocks in the supply of agricultural products, energy and merchandise, and that this accelerates inflation.
Under this scenario, a member warned that it cannot be ruled out that it is necessary to maintain the current level of the reference rate for longer than the market consensus anticipates.
“Given the prevailing inflationary dynamics, I comment that it is extremely risky to include a future guide so, in my opinion, a data-dependent approach must be reinforced,” the financial institution stated.
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This morning, the National Institute of Statistics and Geography (Inegi) announced that in the first half of February, general inflation in Mexico reached a level of 4.45 percent, accumulating two consecutive fortnights of decline.
During the reference period, the price of fruits and vegetables, higher by 17.07 percent annually, was the main component that affected inflation.
2024-02-22 16:46:40
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