Mexico: Inflation rises for the first time since February
June 9, 2016
In May, consumer prices fell 0.45%, which was a faster decrease than the 0.32% drop observed in April. Markets had expected a 0.46% decrease and, according to the National Statistics Institute, May’s monthly drop—the fastest in 12 months—is largely the result of seasonal factors. At this time of the year, the drop in prices reflects discounts in electricity tariffs due to the start of the summer season. In addition, prices for fresh food dropped substantially over the previous month.
Inflation inched up from 2.5% in April to 2.6% in May, which marked the first increase since February. 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 0.21% in May over the previous month, which came in slightly below the 0.22% rise registered in April. Core inflation ticked up to 2.9% in May (April: 2.8% year-on-year).
Author: Ricardo Aceves, Senior Economist