Mexico is facing the risk of weaker domestic consumption and investment as the growth rate of global economic activity moderates, the country’s main financial authorities warned Wednesday, March 30.
The Financial System Stability Council (CESF) said in a statement that global inflation continued on an upward trend, driven mainly by high food and energy prices.
“In this environment, global risks to financial stability persist,” said the council, headed by representatives of the Central Bank of Mexico (Banxico) and the Finance Secretariat.
Among the main challenges that the CESF cited were 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 CESF said that, although 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.