It’s inflation!
Fitch Ratings highlighted that the impact of the war is more noticeable in Mexico in terms of inflation; “The war is likely to lead to further increases in the Consumer Price Index (CPI) given rising global energy and agricultural prices, although gasoline subsidies may mitigate this to some extent,” he detailed.
Fitch expects the headline CPI to peak near 8% mid-year before falling to 4.8% in December. By the end of 2023 it is expected to decrease to 3.5%.
Considering inflation expectations, the rating agency, one of the three most important globally, forecasts that the reference interest rate will rise to 7% this year, and in 2023 it will increase another 50 basis points, so it would remain at 7.5. %.
The latest expectation far exceeds the previous scenarios, in which a rate of 5.25% was expected for 2022, and 5.75% for 2023, Fitch said.
