Mexico: Inflation ticks up on the weak peso in June
July 9, 2018
Consumer prices rose 0.39% from a month earlier in June, contrasting their 0.16% fall recorded in May. June’s rise was driven by a sharp increase in non-core energy prices, while prices for food and services rose only moderately. Core consumer prices—which exclude volatile categories such as fresh produce and energy—rose 0.23% month-on-month, roughly in line with May’s 0.26% uptick.
Inflation rose in June, climbing to 4.6% from 4.5% in May as the weak peso hammered consumers. Market analysts had expected as much. Meanwhile, core inflation inched down to 3.6% from 3.7% a month earlier.
Mexico Inflation Forecast
Banxico expects inflation to moderate in the second half of the year and end 2018 at 3.8%. Moreover, Banxico expects inflation to end 2019 at 3.2%. Panelists surveyed by FocusEconomics expect inflation to end 2018 at 4.0%, which is up 0.1 percentage points from last month’s forecast. For 2019, the panel sees year-end inflation at 3.6%.
Author: Lindsey Ice, Economist