Mexico Inflation

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Mexico: Inflation falls below Central Bank target in May

June 9, 2015

In May, consumer prices fell 0.50% over the previous month. The drop was nearly double the 0.26% decrease observed in April and was on par with market expectations. According to the national statistical institute, the monthly drop reflected lower prices for both agricultural products and electricity prices, stemming from the start of summer electricity subsidies.

As a result of the monthly fall, inflation fell from 3.1% in April to 2.9% in May, which marked the first time that inflation dropped below the Central Bank’s target of 3% since November 2005.

Meanwhile, core consumer prices—which exclude volatile categories such as fresh food and energy—added 0.12% in May over the previous month, which came in below the 0.16% fall tallied in April. Annual core in May inflation remained stable at April’s 2.3%.

In May, the Central Bank (Banxico) stated that it expects inflation to end 2015 below 3.0%, amid a slack in domestic demand. For 2016, the Central Bank sees inflation converging to around 3.0%. LatinFocus Consensus Forecast panelists expect inflation to end 2015 at 3.5%, which is unchanged over last month’s forecast. For 2016, the panel sees year-end inflation at 3.3%.


Author:, Senior Economist

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Mexico Inflation Chart


Mexico Inflation May 2015

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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