The pace of service price increases is taking place despite a stagnant economy, and cyclical conditions should suggest that prices should not be increasing, the economist explained.
“The problem is that our current inflationary phenomenon is pandemic inflation that has very sui-generis conditions, very specific, a very important imported element, but also very local idiosyncratic factors, typical of the Mexican economy, which are contributing to this generalized phenomenon. prices,” Manuel Romo, CEO of Citibanamex, told Heath.
The biggest threat
In this sense, the deputy governor of Banxico explained that the Governing Board seeks a balance between three fundamental factors and the most influential in the monetary policy decision.
The first and most persistent factor is inflation and there are no signs of going down anytime soon. The second factor is the cyclical conditions of the economy, which is stagnant, and that the rise in rates “is not going to help us get out of the recession more quickly, they even complicate it, we have to see,” he considered.
And finally, it is the upward cycle of interest rates in the United States that is about to begin.
“We must have a monetary stance, which in one way or another seeks the balance of these three factors, but we must give weight to each of the three, and the one that worries us the most is the first, the inflationary phenomenon,” concluded the official.
