Last week the Bank of Mexico (Banxico) raised its forecasts for 2022 inflation, warning that the effects of shocks on prices could be prolonged and even worsen. Thus, it raised headline inflation to 8.1% for four quarters and core inflation to 7.6%, from 6.4% and 5.9%, respectively.
At the beginning of August, the monetary authority increased its reference rate for the tenth consecutive time to a historical maximum of 8.5%, in a new attempt to cool down inflation, which has reached a maximum of more than 20 years, reaching 8.15% at an annual rate. in July.
Economists and analysts expect the price rise to peak this month, however the start of the withdrawal of gasoline subsidies raises questions about whether inflation will remain contained.
Last week, Irene Espinosa, deputy governor of Banxico, considered that salary increases could be affected in the following months if prices continue to be high.
“The most desirable thing is that the market determines what wages would be and in the long term, what is important is that wage increases are related to increases in productivity,” he commented.
President López Obrador announced a few months ago the Package Against Inflation and Famine (PACIC), which according to deputy governor Jonathan Heath, if current inflation had not been implemented, it would be double digits.
With information from Reuters
