Mexico Inflation February 2016

Mexico

Mexico: Inflation accelerates in February to the fastest pace in eight months

March 9, 2016

In February, consumer prices rose 0.44% over the previous month. The result was up from the 0.38% increase registered in January, but fell short of the 0.49% increase the markets had expected. The National Statistics Institute (INEGI) pointed out that the monthly increase reflected higher prices for agricultural products—particularly onions and eggs—and an increase in services prices. Conversely, energy prices fell over the previous month.

Following an increase in January, inflation accelerated in February at its fastest pace since June 2015. Inflation rose from 2.6% in January to 2.9% in February, which was only a notch below the Central Bank’s target of 3.0%. Before beginning to rise in January, inflation had hit a record low in December.

The closely watched core consumer prices—which exclude volatile categories such as fresh food and energy—increased 0.36% in February over the previous month, which came in above January’s 0.19% increase. Core inflation inched up from 2.6% in January to 2.7% in February, which reflected only modest pressures from higher imports prices due to the weaker peso.

In March, the Central Bank (Banxico) stated that it sees inflation rising slightly above 3.0% in the second and third quarters of 2016, before ending the year close to 3.0%.In 2017, Banxico expects inflation to stabilize around its 3.0% target. Panelists surveyed for this month’s LatinFocus Consensus Forecast expect inflation to end 2016 at 3.3%, which is down 0.1 percentage points over last month’s forecast. For 2017, the panel sees year-end inflation at 3.3%.


Author:, Senior Economist

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Mexico Inflation Chart


Mexico Inflation February 2016

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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