Mexico Inflation


Inflation stable in May

In May, consumer prices fell 0.32% over the previous month. The reading followed the 0.19% decrease registered in April and was broadly in line with the 0.35% drop the market had expected. The monthly fall in prices reflects a seasonal decrease in energy tariffs owing to the beginning of the summer electricity subsidies, which prompted non-core consumer prices to fall 1.64% over the previous month. Conversely, core consumer prices rose 0.09% in May.

Owing to the monthly fall, annual headline inflation was unchanged at April’s 3.5% in May, which marked the lowest level since October 2013. Inflation remained within the Central Bank’s inflation target of 3.0% with a 1.0% tolerance margin.

Core consumer prices, which do not take into account prices for fresh food, fuels and regulated prices, rose 0.09% over the previous month (April: +0.29% month-on-month). Annual core inflation inched down from 3.1% in April to 3.0% in May.

The Central Bank (Banxico) expects that, by the end of 2014, inflation will close the year below its 4.0% target ceiling. For 2015, Banxico expects inflation to end the year slightly above its target of 3.0%. LatinFocus Consensus Forecast panelists expect inflation to end 2014 at 3.8%, which is down 0.1 percentage points over last month’s forecast. For 2015, the panel sees year-end inflation at 3.5%.

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Mexico Inflation Chart

Mexico Inflation May 2014 0

Note: Month-on-month and year-on-year changes of consumer price index (CPI) in %.
Source: Mexico National Statistics Institute (INEGI).

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