Mexico: Inflation accelerates in October
November 9, 2010
As broadly expected, inflation is trending upwards. In October, consumer prices added 0.62% over the previous month, which not only exceeded September's 0.52% price increase, but also market expectations of a 0.56% monthly price rise. As a result, annual headline inflation jumped from 3.7% in September to 4.0%. The monthly price increase was broad-based, albeit mostly driven by higher prices for housing, in particular for electricity (+11.13% month-on-month) as well as by higher prices for food, beverages and tobacco, driven mostly by more expensive agricultural products. Consequently, the core inflation index, which excludes volatile categories such as oil, fresh fruits and vegetables, added a more subdued 0.25% over the previous month, leaving annual core inflation unchanged at 3.6%. The Central Bank recently lowered its inflation forecast for this year but still projects inflation to accelerate in the final months of the year and to reach between 4.25% and 4.75% by year-end.