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Four Important EM Elections in 2024

• Elections in Indonesia and India should both result in policy continuity as far as the economy is concerned. In South Africa, the election outcome will likely lead to a further deterioration in governance. As for Mexico, MORENA will probably retain the presidency but fall short of its target two-thirds majority in the legislature.

By Alastair Newton

Mexico CPI Inflation 4.66% y-o-y (consensus 4.5%) in Dec-23

- Mexico's CPI inflation rate rose to 4.66% year-on-year in December 2023, slightly surpassing consensus expectations, marking the highest level since July 2023.
- The month-on-month CPI inflation increased by 0.71%, while core CPI inflation, excluding volatile components, undershot expectations to rise by 0.44% in the same period.

Mexico Policy Rate 11.25% (consensus 11.25%) in Dec-23

• Banco de México’s decision to maintain the overnight interbank interest rate at 11.25%, as the consensus expected, reflects a strategic balance between mitigating high inflation levels and supporting ongoing economic resilience.
• The bank’s future policy decisions will be heavily influenced by the trajectory of both headline and core inflation, alongside global economic trends, domestic economic growth and labour market strength.
• The central bank’s policy outlook will consider a range of potential risks, including persistent core inflation and global economic conditions, while remaining adaptable to new economic data, with a focus on achieving its inflation target by the second quarter of 2025.

Mexico CPI Inflation 4.32% y-o-y (consensus 4.4%) in Nov-23

- Mexico's year-on-year CPI inflation for November 2023 was broadly unchanged at 4.32%, slightly below market expectations.
- Core inflation in Mexico rose by 5.3% y-o-y (0.26% m-o-m) in November 2023, signalling relatively resilient underlying pressures, albeit not surprisingly so.