On the first day of the Economic Outlook for Latin America in 2022 seminar, Fitch’s director of sovereign ratings for emerging markets, Ed Parker, emphasized that global inflation shocked markets such as Mexico, because consumers accounted for a larger share of spend your spending on food. and energy. Therefore, the weight of the increases in the price of these products and services is greater for measuring inflation in these countries.
Inflation, the impact of the withdrawal of monetary stimulus by the Fed and the evolution of the Covid, will remain risk factors for Latin America and especially Mexico during this year, analysts at the Fitch rating agency warned.
Tariff increases are expected by the Bank of Mexico, which will allow inflation expectations to be adjusted but also put pressure on the economic recovery, sovereign analyst Charles Seville warned.
Fitch’s director of emerging market ratings, Ed Parker, addressed on the first day of the Latin American Economic Outlook for 2022 seminar that the global inflation shock hit emerging markets the hardest, such as Mexico, as consumers accounted for a larger share of their spending on food and energy. Therefore, the weight of increases in the price of these products and services is greater for measuring inflation in these countries.
In another session, the agency’s Global Sovereign Rating Director, James McCormack, stressed that given the pressure that inflation will remain, emerging central banks will continue to raise rates, which will weigh on economic growth and borrowing costs.
He explained that since the fiscal situation of sovereign issuers in Latin America was less solid than before the pandemic, the increase in interest rates would be another factor of pressure.
Reference-www.eleconomista.com.mx