Mexico Inflation


Mexico: Inflation falls to lowest level in nearly nine years, hits Central Bank target

March 9, 2015

In February, consumer prices rose 0.19% over the previous month. The reading contrasted the 0.09% fall observed in January but undershot the 0.21% rise the markets had expected. The monthly increase was mainly the result of higher prices for core consumer prices, particularly for non-food items and education fees. Conversely, non-core prices fell over the previous month. According to analysts, the pass-through effects from the depreciation of the Mexican peso are still not visible.

Annual inflation inched down from 3.1% in January to 3.0% in February and marked the lowest level since May 2006. Inflation has eased uninterruptedly since October 2014, when it reached a nine-month high, returning to the Central Bank’s inflation target of 3.0%.

Core consumer prices—which exclude volatile categories such as fresh food and energy—rose 0.34% in February over the previous month, which contrasts the 0.03% fall tallied in January. Annual core inflation inched up from 2.3%% in January to 2.4% in January.

In February, the Central Bank (Banxico) stated that it expects inflation to end 2015 below 3.0%, amid 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 February 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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