Javier Guzmán, subgobernador de Banxico. Foto: cortesía Banco de México

Javier Guzmán, subgobernador de Banxico

Javier Guzmán, subgobernador de Banxico. Foto: cortesía Banco de México

The Deputy Governor of Banco de México, Javier Guzmán Calafell, anticipated that the country’s economy would maintain a moderate growth in 2018, in a conference offered at EGADE Business School, in Mexico City.

Deputy Governor Guzmán Calafell’s talk was attended by directors, such as Juan Pablo Murra, Dean of the School of Business of Tecnológico de Monterrey, Ignacio de la Vega, Dean of EGADE Business School, and José Antonio Quesada, Director of EGADE Business School in Mexico City, as well as the institution’s faculty, students and alumni.

The official explained that the global economy is facing a series of risks and challenges that have, to some extent, affected the country’s economic variables, such as uncertainty owing to the monetary policy decisions in economies, including that of the United States, NAFTA renegotiations, and the future relationship of the UK with the European Union.

The following are some of his reflections on the country’s monetary policy outlook:

“In the case of inflation, we are observing figures above those only recently anticipated. In fact, the expected decrease in inflation during the last months of 2017 failed to materialize.”

“In the case of our country, the main concern is the final outcome of the renegotiation of the North American Free Trade Agreement.”

“Even though a significant drop in inflation is still forecast for 2018, the outlook for the evolution of prices during the year has deteriorated.”

“The peso exchange rate is likely to continue to be volatile over the next few months, as a result, among other factors, of the US monetary policy normalization process, the US tax reform, the evolution of NAFTA negotiations, and this year’s electoral process in Mexico.”

“Apart from the impacts of the exchange rate depreciation and diverse demand shocks on prices, Banco de México’s actions have responded to the upward trend of interest rates in the United States.”

“The outlook for the economy over the next few months could possibly imply a high level of exchange rate volatility, particularly during the first half of the year.”

“The Banco de México has to be prepared to take the corresponding actions, as soon as necessary.”

Keywords: banxico, política monetaria, EGADE Business School

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