Mexico Inflation March 2017


Mexico: Inflation keeps rising in March

April 7, 2017

Consumer prices in Mexico rose 0.61% from the previous month in March, which was slightly above the 0.58% increase the markets had expected. March’s increase followed a 0.58% gain in February and stemmed mainly from a sharp increase in prices for fresh food and also higher prices from non-core consumer prices, which continued to reflect the pass-through effect from a weaker peso.

Inflation climbed to 5.4% in March from 4.9% in February, marking the highest level since July 2009. Inflation continued to move further above the 4.0% upper bound of the Central Bank’s target range, and is expected to remain there for most of the year.

The closely-watched core consumer price index—which excludes volatile categories such as fresh food and energy—increased 0.57% in March from the previous month, which was slower than the 0.76% rise seen in February. The slowdown in March reflected lower energy prices, since the effect of the hike in gasoline prices in January is fading. However, as fresh food prices rose substantially, core inflation rose from 4.3% in February to 4.5% in March, the highest rate seen since January 2010.

In its March inflation report, the Central Bank highlighted that inflation will remain above its 3.0% target for most of the year and gradually converge to the target toward the end of 2018. Panelists surveyed by FocusEconomics this month expect inflation to end 2017 at 5.1%, which is up 0.1 percentage points from last month’s forecast. For 2018, the panel sees year-end inflation at 3.7%.

Author:, Senior Economist

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Mexico Inflation Chart

Mexico Inflation March 2017

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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