Mexico’s Central Bank doesn’t expect a recession in Mexico or the US

Victoria Rodríguez Ceja, Governor of the Bank of Mexico (Banxico), assured this Wednesday that the national economy is not headed for a recession, this after the cut in the growth forecast for 2023.

“We are not expecting a recession in the United States or in the case of Mexico,” he said at the presentation of the quarterly report, April-June 2022.

When presenting the document, the official highlighted that inflation has continued to present unanticipated shocks, reaching levels higher than expected, which is why it is at levels not seen in two decades.

And regarding the National Consumer Price Index, Deputy Governor Jonathan Heath expressed that “the gasoline subsidy policy has helped us a lot to limit inflation, since otherwise, it could have been much higher, I don’t know if 14 percent or more because there are second-order effects.”

However, the economist warned that the “negative” part of the support for the IEPS payment of gasoline is that when gasoline prices begin to fall worldwide, this will not be reflected in Mexico.

Victoria Rodríguez explained that inflation has very important and stronger impacts on families with fewer resources.

“In this sense, Banxico’s failure to act would surely lead us to have higher inflation rates than we have,” he commented.

“I want to communicate to families and society in general that the Central Bank’s commitment is very strong and has been demonstrated in all the decisions we have made. We have indicated in our most recent statement that we will continue to increase rates in accordance with the information available and the situation prevailing at the time of the decision, and we will continue to comply with our constitutional mandate so that inflation returns to its goal, seeking to maintain the purchasing power of all families,” he stressed.

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