Nevertheless, some factors point toward a possible decline in annual inflation next year, including favorable base effects from 2014 tax hikes, a reduction in gasoline price rises, and some probable drops in telecommunications charges stemming from new regulations. Despite these positives, some upside risks bear watching, such as possible pass-through from peso depreciation and unexpected agricultural price increases.
These considerations are all the more important as convergence to the permanent inflation target has been taking years, and analysts’ expectations remain above the permanent target. 7  See, for example, the studies reviewed by Mishra, et al. (2014), “Impact of Fed Tapering Announcements on Emerging Markets.” IMF Working Paper WP/14/109. 8  See Blue Chip Economic Indicators, October 2014.