Mexico Inflation


Mexico: Inflation rises further in April; expected to fall in the second half of the year

May 9, 2013

In April, consumer prices rose 0.07% over the preceding month, which came in well below the 0.73% increase seen in March but contrasted the 0.31% price drop recorded in the same month last year. The figure was broadly in line with market expectations. Higher agricultural as well as government regulated prices offset the season drop seen in energy tariffs -stemming from the start of summer electricity subsidies- prompting non-core prices to remain flat over the previous month.

As a result, annual headline inflation jumped from 4.3% in March to 4.6% in April, which represents the highest level in seven months. Annual average continued trending upwards, rising from 4.1% in March to 4.2%.

Meanwhile, core consumer prices -which exclude volatile prices as well as energy and other government regulated tariffs- added only 0.08% over the previous month, which prompted annual core inflation to inch down to 2.9% in April (March: 3.0% year-on-year).

In its latest inflation report from May, the Central Bank stated that inflation was likely to rise further in May before resuming a downward trend after June. Monetary authorities expect inflation to end this year at between 3.0% and 4.0%, before moderating to levels close to its long-term inflation target of 3.0% in 2014. LatinFocus Consensus Forecast panellists expect inflation to end this year at 3.7%, which is unchanged from last month's forecast. For next year, the panel sees year-end inflation also at 3.7%.


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Mexico Inflation Chart

Mexico Inflation April 2013

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Mexico National Statistical Institute (INEGI).

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