For Mexico, it is expected that the continued monetary restriction and the slowdown in its activity will reduce inflation to said objective by 2025.
Banxico reduced its reference interest rate to 10.50% in a split decision in September. But meeting minutes showed council members hope easing inflation will allow further cuts.
“Risks to inflation remain on the upside,” the IMF said, warning that weaker-than-expected economic growth in the United States, rising global risk aversion and unforeseen effects from recent reforms could weigh on the economy. production of Mexico.
The IMF said a recent judicial reform creates “significant uncertainties about the effectiveness of contract enforcement and the predictability of the rule of law.” Mexico’s ruling party and its allies approved the reform last month, arguing that it will reduce corruption in the judiciary by introducing popular election of judges and magistrates.
But the initiative has raised concerns from important trading partners such as the United States and Canada and protests from judges and magistrates.
Mexico’s current account deficit is also expected to widen slightly in 2024 as imports related to investment and consumption exceed exports.
The IMF says Mexico needs a medium-term fiscal strategy to reduce deficits and debt, increase revenues and create room for investments in human and physical capital.
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