Publications

Consumer prices rose by 2.06% m/m, lower than both consensus (2.4%) and our expectation (2.5%), driving annual inflation down to 33.5%. Considering unanchored inflation expectations, high services inertia and upward pressure on the food inflation going forward, we expect the year-end inflation to reach 30%.

Consumer prices rose by 1.37% m/m, lower than both our expectation and the consensus (1.5%), driving annual inflation down to 35.05%. Given the positive surprises of the last 3 months, we underline a high likelihood of a year-end consumer inflation below 30%.

On Monday, February 3, the heads of state of Mexico and the US reached an agreement to put on hold for a month the imposition of tariffs that the White House pretended to apply to imports coming from Mexico.

Given more synchronization of economic growth and inflation between Mexico and the US due to the presence of Global Value Chains (GVC), the cost of protectionist measures in the latter (the imposition of a 10% universal tariff on all imported products) on activity, inflation and welfare of the former would be amplified.

December's inflation increased to 3.4%, driven by a monthly variation of 0.3%. At 3.9%, core inflation rose by 0.3% month-on-month, influenced by used cars and shelter; the latter remains a key factor for the expected decline in inflation in the coming months.

Chinese economy slowed down in Q2 amid housing crash and deflation expectation. We expect the economy could bottom out in the rest of year with the help of policy support.

Monthly inflation in October was 0.72% and annual inflation was 12.22%, close to market analysts' expectations of 0.62%, according to Banco de la República's survey, and BBVA Research's of 0.64%. The data increased 78 bps from September's annual figure.

The low inflation environment in China during the past two years when China “first-in, first-out” of the pandemic while the rest of the world was grappling against the coronavirus has started to bear some changes recently with the CPI trending up.