Link to Article: Mexico inflation descent to be long, slow process, board member says | Reuters
The Mexican Central Bank has recently said that the inflation of the Mexican Peso is going to be a long descent and will likely not be down until 2024. Mexico is trying to lower their inflation to be below 3%. The current rate of inflation is 7.28%. The Mexican Central Bank has also said that inflation is likely to reach a peak in 2023 before it descends. This means that the Peso is in peril of inflation destroying the economy of Mexico. If this happens it is unknown what repercussions will occur on the international stage as Mexico is the 15th largest economy.
COVID has impacted the Mexican economy and inflation as it has every other currency. Mexico’s economy is also closely tied to the United States economy which is currently suffering from a 7.87% inflation rate which is also raising the inflation rate in Mexico. The war that Russia is waging on Ukraine is also negatively impacting the Mexican economy as unlike most other precious metals silver has gone down in value since the conflict started instead of up like most other precious metals. Mexico has also poorly utilized their natural resources which does nothing to help their current economic situation.
If Mexico continues to suffer from high inflation rates it will start to negatively affect the world economy as a whole. It will also likely raise the price of silver as Mexico will need to raise the price in order to buoy their economy. Since Mexico controls so much of the silver production in the world this is a feasible task for them. This would cause the cost of many electronics to increase and would in turn increase the cost of many goods for all consumers regardless of where they live.