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Mexico Inflation April 2023

Mexico: Inflation falls to over one-year low in April

Inflation dropped to 6.3% in April, below March’s 6.8% but still more than double the Central Bank’s 3.0% target. April’s result marked the lowest inflation rate since October 2021. The reading was largely due to a more moderate rise in prices for transport, food, beverages and tobacco. In addition, prices for housing decreased.

Annual average inflation fell to 7.8% in April (March: 7.9%). Meanwhile, core inflation fell to 7.7% in April, from the previous month’s 8.1%.

Finally, consumer prices dropped 0.02% over the previous month in April, contrasting March’s 0.27% rise. April’s result marked the weakest reading since April 2020.

The fall in core and headline inflation boost the chance of Banxico staying put at its 18 May meeting.

On monetary policy, Goldman Sachs’ Alberto Ramos said:

“Given the broad stability of inflation expectations, FOMC policy signals, slight progress on the core and services inflation front, and the already quite restrictive monetary stance, the MPC is likely to hold the policy rate unchanged at the May meeting.”

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