The risks to the inflation outlook appear to be broadly balanced for 2019 and 2020. The main upward risks are the petitions for electricity rates and transport fare adjustments, and the proposed increase in the excise taxes of alcoholic beverages and cigarettes. The risk of a prolonged El Niño episode has gone down.
On the external front, the global economic slowdown due to protectionist policies in advanced economies, as well as geopolitical tensions continue to be the main downside risks to inflation. Inflation expectations are also starting to converge with the government’s target range.