The Mexican peso depreciates amid economic uncertainty and high inflation.

The Mexican peso has experienced a new decline, reflecting the fragility of the national economy and the persistent threat of inflation. On Thursday, the national currency depreciated slightly, trading at 19.53 pesos per dollar, representing a decrease of 0.8%. This drop follows the recent release of economic data confirming a slowdown in growth, as well as a slight decrease in inflation, which nonetheless remains well above the targets set by the Bank of Mexico. According to the National Institute of Statistics and Geography (Inegi), the seasonally adjusted Gross Domestic Product (GDP) showed an increase of 0.2% during the second quarter of the year compared to the previous one. However, when analyzed in annual terms, the increase was only 1%, raising concerns about the country's economic recovery. The slight improvement in economic activity contrasts with the persistent inflationary pressure, which stood at 5.16% in the first half of August, a decrease that, although positive, is still deemed unacceptable in relation to the target range of between 3% and 4%. Investors have reacted to this situation by selling their positions in pesos, a move that has contributed to the decline in the exchange rate. This trend intensified on Wednesday when the Mexican currency fell by 1.75% due to both internal and external factors. In particular, a downward revision in the number of jobs created in the United States, Mexico's main trading partner, has fueled a climate of pessimism regarding economic prospects. Additionally, the possibility that the ruling party and its allies may achieve a qualified majority in Congress has generated nervousness among investors, who fear this could facilitate the approval of reforms to the Judiciary that might negatively impact the business climate and investments. In this context, analysts at Banorte warned about the "headwinds" facing economic activity. They emphasized the need to be vigilant about the potential effects of the La Niña phenomenon on agricultural production and the importance of the rainy season in the coming months. They also noted that if the slowdown in economic activity in the United States persists, it is likely that manufacturing in Mexico will see a moderation in its growth. Despite these challenges, some analysts, such as those at Citibanamex, hold a more optimistic view regarding inflation. According to their projections, this indicator is expected to maintain a gradual downward trend, with an estimate that it will close the year at 4.4%. This opinion is based on recent decreases in the prices of agricultural products and some services, which have exceeded economists' expectations. However, current economic data suggest that the Mexican economy is at a crossroads. The fall of the peso is a symptom of a greater lack of confidence among investors, fueled by political uncertainty and weakness in economic growth. The combination of persistently high inflation and anemic economic growth poses serious challenges for the country's economic policies. The government, for its part, faces the difficult task of stabilizing the economy and restoring investor confidence. The decisions made in the coming months will be crucial in determining the direction of the Mexican economy and the strength of the peso against the dollar. The current situation may force authorities to rethink their strategies to address inflation and promote sustained growth. In summary, the economic outlook for Mexico appears complex and full of uncertainty. The decline of the peso, persistent inflation, and weak growth are factors that policymakers will need to handle with care to prevent the situation from worsening. In this regard, it is essential to implement measures that strengthen investor confidence and promote a more stable economic environment. The Mexican economy requires not only short-term solutions but also a long-term vision that considers future challenges and potential opportunities.