Annual inflation in Mexico slows down
2022.12.08 08:36
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Annual inflation in Mexico slows down
Budrigannews.com – Even though the core index remains a concern, data from the national statistics agency INEGI revealed on Thursday that Mexican consumer prices increased by 7.8% throughout the year through November, slowing from the previous month to reach its lowest level since May.
According to Reuters polls, economists expected annual inflation in Latin America’s second-largest economy to reach 7.93 percent in November, down from 8.41% the month before.
Andres Abadia, chief Latin America economist for Pantheon Macroeconomics, stated, “Overall, this is a relatively good report.” He noted that headline inflation continued to ease as a result of the delayed effect of tighter financial conditions.
Since June 2021, Mexico’s central bank has been pushing for aggressive monetary tightening due to rising costs. Despite a cooling trend, inflation remains well above the target of 3%, plus or minus 1 percentage point.
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Following a split decision last month, the benchmark interest rate currently stands at a record 10% at the Bank of Mexico’s next monetary policy meeting next week.
According to non-seasonally adjusted data, consumer prices increased 0.58 percent in November, below the market consensus of 0.69 percent.
The core index, which excludes some volatile energy and food prices and has been a major national concern, rose 0.45 percent in the month, which was also lower than forecasts of 0.52 percent.
That was a decrease from October, when it had increased by 0.63 percent. However, the 12-month rate was still higher than October’s 8.42 percent, so it was unlikely to provide complete relief.
Core inflation remains relatively stable, despite the fact that headline inflation reached its highest point toward the end of Q3. Despite the “first signs that core inflation is slowing at the margin,” Abadia predicted a new 50 basis point rate hike next week “the latter will continue to make Banxico uneasy.”
