Mexico faces the risk of weaker domestic consumption and investment


Mexico faces the risk of weaker domestic consumption and investment, as the growth rate of global economic activity moderates, the country’s main financial authorities have warned.

The Financial System Stability Council said in a statement that global inflation continued on an upward trend, driven mainly by high food and energy prices, reports Xinhua news agency.

“In this environment, global risks to financial stability persist,” the Council, headed by representatives of the Central Bank of Mexico and the Ministry of Finance, says.

Among the challenges, it cited greater risk aversion due to recent geopolitical conflicts, which could lead to a greater “tightening” of global financial conditions, namely higher interest rates.

Regarding Mexico, the Council noted that although the economic activity is beginning to recover from the “shock” caused by the Covid-19 pandemic, the risk of weaker consumption and investment still exists.

However, it said the Mexican financial system is showing resilience, with the banking and insurance sectors maintaining a solid position, and capital and liquidity levels staying above regulatory minimums.

Source: El Financiero

Mexico Daily Post