Mexico: Inflation stable in September
October 7, 2010
In September, consumer prices added 0.52% over the previous month, which nearly doubled the 0.28% price rise recorded in August, but broadly matched market expectations of a 0.56% monthly price increase. As a result, annual headline inflation remained unchanged at August's 3.7%. The monthly price increase was broad-based, although mostly led by higher prices for education and recreation (+1.35% month-on-month) as well as for food, beverages and tobacco (+0.77% mom). Meanwhile, the core inflation index, which excludes volatile categories such as oil, fresh fruits and vegetables, added a more subdued 0.38% over the previous month. As a result, annual core inflation inched down from 3.7% in August to 3.6%. However, more recent data suggest that annual inflation is accelerating. In the first two weeks of October, consumer prices increased 0.48% over the previous month, beating market expectations of a 0.40% rise. In its latest inflation report released in late October, the Central Bank cut its inflation forecast by 0.50% and thus projects inflation to close the year at between 4.25% and 4.75%.