The members of the Governing Board also updated their inflation forecasts for the following quarters. They estimate that at the end of 2021 inflation will be 6.8% compared to the 6.2% that they had published last September.
Inflation is estimated to converge to the target of 3% +/- one percentage point in the third quarter of 2022.
“Global and domestic inflationary pressures continue to affect annual headline and core inflation, which in October registered 6.24% and 5.19%, respectively. Expectations of headline and core inflation for 2021, the next 12 months and 2022 increased again, while that long-term loans have remained stable at levels above the goal, “the Governing Board reported in the statement.
Among the upward pressures are external inflationary pressures, cost pressures, persistence in core inflation, the depreciation of the exchange rate, and an increase in the price of energy and food.
The Governing Board stated that the shocks that have affected inflation are mainly temporary. “However, the horizon in which they could affect it is uncertain, they have impacted a wide range of products and their magnitude has been considerable, increasing the risks for price formation and inflation expectations.”
What about inflation in Mexico?
In October, the increase in the prices of electricity, LP gas and some foods such as eggs and onions, caused that annual inflation out of 6.24% .
Core inflation, which is considered a better parameter to measure the trajectory of prices because it eliminates highly volatile products, increased to 5.19%, a level not seen since May 2009.
Last October, the deputy governor of Banxico, Janthan Heath said he was concerned about “pandemic inflation” and its possible permanence, especially in core inflation.
“There was definitely a disruption in consumption patterns due to inflation, there is no doubt, perhaps we will see some permanent effects of this change in household consumption,” he said during the presentation of his book What the indicators indicate.
At that time, the also doctor in Economics said that it is possible that there will be a peak in inflation in the first quarter of 2022.
