Mexico Inflation June 2016

Mexico

Mexico: Inflation remains muted in June

July 7, 2016

In June, consumer prices rebounded and rose 0.11% (May: -0.45% month-on-month). The monthly increase contrasted two consecutive months of decline and fell short of the 0.17% rise the markets had expected. According to the National Statistics Institute, June’s result stemmed mainly from an increase in the core component of the consumer price index, with prices of both products and services rising over the previous month. Conversely, non-core prices—particularly prices for fresh food—fell substantially in June.

Inflation edged down from 2.6% in May to 2.5% in June and the result was in line with the Central Bank’s view that inflationary pressures remain contained for now and that inflation continues to hover below its target of 3.0%.

Closely-watched core consumer prices—which exclude volatile categories such as fresh food and energy—increased 0.25% in June over the previous month, which came in slightly above the 0.21% rise registered in May. Core inflation ticked up to 3.0% in June from May’s 2.9%.

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 June 2016 0

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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