“Banxico’s forecasts imply a challenging outlook for the Mexican economy due to the economic stagnation, where although we hear that this year we are going to grow 6%, it is still a rebound effect and it is not enough to be a complete recovery,” said Gabriela Siller, director of economic-financial analysis at Banco Base.
The January slope is always tricky because it is a seasonal issue that happens every year regardless of how the economy is doing, said Luis Gonzali, Vice President and Co-Director of Investments at Franklin Templeton.
“In this case we are in recovery and yes, definitely on the January slope there will be price adjustments that are lagging behind and in terms of real purchasing power it will be less and there will be an impact on the pocket and purchasing power” added.
Why did Banxico raise the interest rate?
Although the pressures are expected in the first part of 2022, it is ruled out that inflation and the recent rise in the interest rate to 5.5% determined by Banxico, suppose some effect on this season of El Buen Fin, which began on October 10. of November.
“Monetary policy does not have an immediate impact, but it takes 12 months, so what they are doing (in Banxico) may be impacting in 12 or 18 months once everything is normalizing, and when we talk about a post-pandemic or what the light is already seen at the end of the road with the pandemic, that there are no new waves or that are no longer significant, “Siller said.
The economist stressed that there is currently a negative gap in GDP, that is, it is below its potential and this also pulls inflation down.
“Banxico is not so concerned about inflation, despite the fact that its constitutional mandate, Banxico’s current priority is -from my point of view- not to let the economy sink and for this they manage a monetary policy in expansionary terrain,” he agreed. Iván Franco, economist and director of the consulting firm Triplethree International.
Franco considered Deputy Governor Gerardo Esquivel to be fair, who voted to keep the rate at 4.75%, which represents a loose monetary policy because he does not want to affect the economic recovery with a high rate.
How does the January slope affect?
Marisol Huerta, an analyst at Ve por Más (Bx +), said that a good end of the year is expected in consumer confidence since jobs are recovering as well as the arrival of remittances, which this year aims to achieve a historical record.
“What makes us see is that there is a consumer that is strengthened in terms of spending and favorable expectations for the end of the year. We see an optimistic consumer but we expect a consumer aware that a difficult part is coming,” he said.
“A complicated year-end is coming and a very heavy January slope. With this (you have to be) very careful when spending, especially now that the Christmas bonus is coming, and also when you get into debt,” said the Banco Base specialist.
