Goodbye to the Good End effect: inflation rises in December

Goodbye to the Good End effect: inflation rises in December

The good news, according to the Citibanamex Expectations Survey, is that core inflation -considered a better parameter to measure the trajectory of prices- will be 8.32% per year, when the past fortnight it stood at 8.51%.

Although inflation expectations at the end of this year are expected to be 8%, expectations for 2023 suggest that inflation will be 5%, a rate that is still far from the central bank’s target.

With a slowdown in underlying inflation, the central bank could make a more moderate interest rate increase. Analysts estimate that next February the rate will rise only 25 basis points, after last week the rate closed at 10.5. %.

The members of the Board of Governors of Banco de México have highlighted that will give priority to the trajectory of core inflation to make future decisions.

Banxico estimates that inflation will converge to the 3% target in the fourth quarter of 2024.



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