Global Scenario : Slowdown and geopolitical risks

Globally, the economic slowdown is evident. The US Federal Reserve plans to tighten monetary policy, as the Fed's main focus (inflation) is still not fully under control. Geopolitical risks further complicate the outlook, generating uncertainty in various sectors and raising transportation costs.

Global economic activity has shown signs of slowing with China leading the moderate growth outlook and the Eurozone dealing with the consequences of supply shocks. In this environment, the resilience of the local economy faces volatility in international markets.

Local Scenario : Resilience and sectoral challenges

At the local level, the economy exhibits resilience, but sectoral heterogeneity is notable. Some sectors, such as fisheries and mining, face transitory challenges, while the labor market and investment remain relatively stable.. At the same time, the depreciation of the peso raises questions about its impact and how China's weakness could influence these dynamics.

Consumption and investment, key drivers of the local economy, remain stable, but changing global conditions suggest caution. The discussion on monetary policy becomes crucial to anticipate and counteract the effects of the slowdown.

Monetary Policy Analysis | An Anticipated Challenge

Convergence to a neutral Monetary Policy Rate (MPR) during the second half of 2024 is the common goal. However, the magnitude of the cut and the actual transmission of the decision to the market generate tactical differences.

The projection of the U.S. Federal Reserve towards tighter monetary policies raises questions about the local exchange rate, given the interest rate mismatch between the U.S. economy and ours. In any case, the anticipated convergence of the TPM is important to maintain stability and confidence.

Inflationary and global tensions

The January meeting revealed that inflation has been below expectations, but risks remain. The global environment, marked by the slowdown in China and uncertainty in the Eurozone, adds pressure. The US Federal Reserve has postponed the interest rate cut, affecting market expectations.

At the local level, economic activity continues as expected, with the labor market showing consistency with the economic cycle. Credit demand shows improvements in consumption, but with little dynamism in other segments.

Navigating uncertain waters with determination

In the midst of a volatile economic environment, monetary policy emerges as a crucial rudder. The ability to anticipate and adapt to turbulence defines the precise course. 

Economic stability and confidence in the future require not only rate cuts, but clear and strategic communication.

Tomas Fernandez 

Analyst ADC Fynsa