Although this increase owes partly to the more volatile components of the Consumer Price Index (CPI) and the depreciation of the peso, inflation of the items in the basket that are most sensitive to the activity gap—ie. services and nontradables—has risen gradually, but steadily, over the course of 2018. This is in line with the growth recovery that began more than a year ago, in a context of favorable external conditions and a clearly expansionary monetary impulse. This process took a pause in the third quarter due to specific factors affecting mining and manufacturing, but it is estimated to resume in the fourth quarter. The October Imacec released this morning is an indication, as it shows activity growing 4.2% annually, with the non-mining component growing 5.1%. With this, the economy will grow 4% this year and between 3.25% and 4.25% in 2019. Inflation will follow a similar path, slowing down for some months as a result of the fall in international fuel prices, to then begin rising and converging to 3% towards the end of 2019. Key factors in this outlook are the observed dynamism of investment and a vision of the labor market that, once all the available information has been analyzed, and factoring in the impact of the significant immigrant flow of recent years, shows that its dynamism is in line with the better performance of the economy.
In this connection, guidance for financial institutions to classify economic activities that contribute to climate change objectives is provided through our work in developing a principles-based taxonomy. This would be the start to build deeper understanding in climate risk, for financial institutions to better identify, assess and manage the risk. The Bank is now working to finalise the Climate Change and Principles-based Taxonomy, which is expected for issuance next year. The Bank also collaborates with the financial industry to accelerate initiatives to build the required capacity and expertise relating to green and sustainability. Through the Value-based Intermediation Community of Practitioners (VBI CoP), various guidance documents have been developed to spur adoption of VBI, which considers the triple bottom line of people, planet and prosperity. In August this year, the Value-based Intermediation Financing and Investment Impact Assessment Framework (VBIAF) Sectoral Guides on Palm Oil, Renewable Energy and Energy Efficiency were issued to guide financial institutions in implementing VBIAF on these sectors at a more granular and transactional level. Work is also in progress to develop the next VBIAF Sectoral Guides on Manufacturing, Oil and Gas, Infrastructure and Construction, targeted for issuance in 2021. Furthermore, greater climate disclosure by financial institutions is in the pipeline; as we are progressing plans to further encourage financial institutions to adopt the TCFD recommendations for climate-related disclosure.