Mexico Inflation


Inflation unchanged in May; well above Banxico's target

In May, consumer prices dropped 0.33% over the previous month. The figure contrasted the 0.07% price increase seen in April but was broadly in line with market expectations. The monthly fall in prices reflects a seasonal drop in energy tariffs owing to the beginning of the summer electricity subsidies, which prompted non-core prices to fall 2.05% month-on-month. In contrast, core prices rose 0.20%.

Despite the subdued monthly reading, annual headline inflation remained unchanged at April's 4.6%, which represents the highest level in eight months. Annual average was also unchanged at the previous month's reading of 4.2%.

In its latest inflation report from May, the Central Bank stated that inflation was likely to rise further in May before resuming a downward trend after June. Monetary authorities expect inflation to end this year at between 3.0% and 4.0%, before moderating to levels close to its long-term inflation target of 3.0% in 2014. LatinFocus Consensus Forecast panellists expect inflation to end this year at 3.7%, which is unchanged from last month's forecast. For next year, the panel sees year-end inflation also at 3.6%.


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Mexico Inflation Chart

Mexico Inflation May 2013

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Mexico National Statistical Institute (INEGI).

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