Insecurity, Behind Inflation Resistance

The problems of insecurity in the country, transport costs and low competition in some sectors of the market are complicating the task of Banco de México (Banxico ) in the fight against inflation. "Many structural factors are at stake: security problems, transport cost problems, little competition in many sectors, companies that have a lot of market power and these kinds of things make our work very difficult," said Sub-Governor Jonathan Heath i…

Reading time approx.: 2 minutes, 40 secondsIn a position exposed on previous occasions, the sub-governor noted that pressures on core inflation involve structural factors, ranging from insecurity problems or transport costs, to little competition between economic sectors.The heads of monetary policy are concerned about the trajectory shown by general inflation in Mexico, particularly underlying inflation, which measures the performance of prices…

Problems of security, transport and little competition could be hindering the work of Banco de México (Banxico) to bring inflation to the target, said sub-governor Jonathan Heath. He considered that “the tenuous downward trend of underlying inflation,” particularly in the service component, “seems not to be responding to the cyclical conditions of the economy.” This could show that “there are more structural factors behind the downward resistanc…