Mexico Inflation


Mexico: Inflation speeds up and rises to five-month high

August 7, 2014

In July, consumer prices rose 0.28% over the previous month, which came in above the 0.17% increase observed in June. The result, which was in line with 0.25% increase the markets had expected, mainly reflected higher non-core consumer prices, particularly prices for fruits and vegetables.

Owing to the monthly increase, annual headline inflation rose from 3.8% in June to 4.1% in July, which marked the highest level in five months. Inflation climbed above the Central Bank’s plus 1.0 percentage point ceiling of its 3.0% target.

Core consumer prices, which strip out volatile categories such as fresh food and energy prices, rose 0.19% over the previous month, which mirrored the 0.21% rise observed in June. Annual core inflation ticked up to 3.2% in July (June: 3.1% year-on-year).

The Central Bank (Banxico) expects that by the end of 2014 inflation will be below the 4.0% target ceiling. For 2015, Banxico expects inflation to fall to around 3.0%. LatinFocus Consensus Forecast panelists expect inflation to end 2014 at 3.8%, which is down 0.1 percentage points over last month’s forecast. For 2015, the panel sees year-end inflation at 3.5%.

Author:, Senior Economist

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Mexico Inflation Chart

Mexico Inflation July 2014

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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