Omar Mejía, Deputy Governor of the Bank of Mexico (Banxico), stated that the recently proposed “health taxes” may lead to a modest increase in inflation—about two percentage points within the National Consumer Price Index (INPC) basket. He emphasized that the effect would be temporary and not indicative of widespread price hikes.
Speaking at the National Economic Strategy Forum hosted by Universidad Panamericana, Mejía explained that a noticeable adjustment could appear when comparing January 2025 to January 2026, but that the impact would fade in subsequent readings. Unlike broader tax reforms, he noted, this measure is not expected to affect multiple categories within the price index.
On the relationship between fiscal and monetary policy, Mejía said Banxico treats fiscal decisions as given and incorporates them into its forecasts and macroeconomic assessments. While there is no explicit coordination between the two policy areas, each evaluates economic conditions according to its own mandate.
Mejía added that Mexico’s fiscal position remains sustainable. He pointed out that the country has more fiscal room than many emerging economies with similar credit ratings, largely because its debt-to-GDP ratio remains relatively low. Advanced economies, by contrast, have relied more heavily on public debt to finance development, resulting in higher debt levels.
Outlook for the Exchange Rate
Regarding the peso–dollar exchange rate, Mejía noted that responsible economists avoid making precise currency forecasts due to their inherent uncertainty. Still, he acknowledged that several global factors currently point to a weaker dollar against a basket of currencies.
He highlighted that the exchange rate plays an important shock-absorbing role for Mexico and remains one of the economy’s key stabilizing mechanisms. The peso’s value, he stressed, has been determined by market forces for decades.
When asked about the narrowing interest-rate differential between Mexico and the United States amid recent capital outflows, Mejía said the change is not a cause for concern. He added that, although some observers view the historical average differential as a benchmark, Banxico does not target a specific level.
He attributed the recent shift partly to the resilience of the U.S. economy, supported by increased investment in artificial intelligence, while Mexico faces a different context. The weaker dollar has also contributed to reducing rate differentials globally.
Mejía concluded that, once adjusted for volatility, Mexico still offers an attractive interest-rate advantage compared with similar economies. He expects such analyses to become increasingly relevant for investors going forward.
Source: El Financiero
