Mexico Inflation April 2016


Mexico: Inflation moderates further in April

May 9, 2016

In April, consumer prices fell 0.32%, which was faster than the 0.26% decrease the markets had expected. April’s plunge contrasted a 0.15% increase observed in March and was the first monthly drop since May 2015. As usual, around this time of the year, the decline in consumer prices is largely driven by seasonal factors related to electricity tariffs. In addition, the monthly drop also reflected lower prices for fresh food.

In April, inflation fell for a second consecutive month, following February’s peak of 2.9%. Inflation edged down from 2.6% in March to 2.5% in April, which was the lowest level since December 2015. The result was in line with the Central Bank’s view that inflationary pressures remain contain for now and that inflation continues to hover below its target of 3.0%.

The closely watched core consumer prices—which exclude volatile categories such as fresh food and energy—increased 0.22% in April over the previous month, which marked a slower increase compared to the 0.36% rise registered in March. Core inflation remained stable at March’s 2.8% in April.

The Central Bank (Banxico) sees inflation rising slightly above 3.0% in the second and third quarters of 2016, before ending the year close to 3.0%. In 2017, Banxico expects inflation to stabilize around its 3.0% target. Panelists surveyed for this month’s LatinFocus Consensus Forecast expect inflation to end 2016 at 3.3%, which is down 0.1 percentage points over last month’s forecast. For 2017, the panel sees year-end inflation at 3.3%.

Author:, Senior Economist

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Mexico Inflation Chart

Mexico Inflation April 2016

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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