Mexico Inflation August 2016

Mexico

Mexico: Inflation remains stable in August

September 8, 2016

In August, consumer prices rose 0.28% over the previous month, which followed a 0.26% increase in July and was virtually in line with the 0.27% rise the markets had expected. According to the National Statistics Institute, August’s result stemmed mainly from an increase in the non-core component of the consumer price index, namely prices of fresh food and energy.

Inflation remained stable at July’s six-month high of 2.7% in August 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 0.19% in August over the previous month, which virtually mirrored the 0.17% rise in July. Core inflation stabilized at July’s 3.0% in August.

The Central Bank (Banxico) sees inflation 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 August 2016 1

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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