Jamie Spencer
What Happened
Deputy central bank governor Jonathan Heath told newspaper Excelsior on Monday that Mexico’s headline and core inflation rates are expected to fall below 4% in January. Heath emphasized that the central bank does not need to adopt an excessively restrictive monetary stance as inflation trends downward.
Why It’s Important
The forecast marks a potential milestone for Mexico’s economy, as the central bank works toward its 3% inflation target. However, risks remain as U.S. President-elect Donald Trump has proposed policies that could increase economic pressures on Mexico, including blanket tariffs on exports to the U.S. and mass deportations, which may stoke inflation.
Context
In December 2024, Mexico’s headline inflation rate eased to 4.21%, while core inflation ticked up slightly to 3.65%, according to official data. Heath hailed these developments as “good news,” highlighting the progress in reducing inflation to its lowest level since October 2023.
The Bank of Mexico has maintained a cautious approach, balancing efforts to curb inflation with the need to support economic growth amidst external risks posed by U.S. policy changes.
By the Numbers
- December headline inflation: 4.21%
- December core inflation: 3.65%
- Central bank’s inflation target: 3%
What’s Next
As Mexico’s central bank aims to meet its 3% inflation target, it will need to navigate challenges stemming from potential U.S. policy shifts under the new administration. The central bank’s next steps will be closely watched as it balances restrictive measures with economic growth considerations.
