For 2018-2019, inflation will be higher than expected.


For 2018-2019, inflation will be higher than expected.

The inflation rate that was proposed to reduce the Bank of Mexico to the target range of 3 plus / minus one percentage point has been questioned due to the downfall of the Mexican peso against the dollar in recent months.

 

Also, several distinguished economists have considered that inflation may be over four percent at the end of 2019.

 

Derived from the highest level of inflation in the last 17 years, which was reached in December 2017, annual inflation in the month of May has registered a rate of 4.51%, which represents the fifth month in decline.

 

“However, the risks have been intensified as some pressures from the recent weakening of the currency, in the middle of an economy which is close to its potential, could affect the stabilization of the central component,” according to the British Bank Barclays.

 

Housing and education services accelerated from 3.2 to 3.7 in May and derived from the non-underlying pressures of energy prices, which has caused the general inflation to rise of up to 4.1 percent year on year.

 

It is anticipated that inflation this year will close at 4.50 percent, according to several economists of Vector Casa de Bolsa, while Invex and Banorte have an expectation of 4.30 percent, on the other hand, the Swiss bank, Suisse Credit Suisse, estimates a rate of 4.20 percent, while Scotiabank forecasts a rate of 4.13 percent, according to the latest survey conducted by Citibanamex.

 

It is important to note that, at the end of 2019, two financial institutions, such as Citibanamex and Pro Asset Managemente, have foreseen that the inflation rate was above the upper limit of the tolerance range made by Banxico, with rates of 4.20 and 4.19 respectively.

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