Mexico: Inflation continues to gradually accelerate
July 22, 2011
In June, consumer prices remained flat over the previous month, which contrasted the 0.74% price drop recorded in May but was in line with market expectations. The reading was the result of lower prices for food and non-alcoholic beverages, which offset moderate price increases in nearly all remaining categories. Despite the subdued monthly reading, annual headline inflation inched up from 3.2% in May to 3.3% in June, which remains close to the Central Bank's permanent inflation target of 3.0%. Although data for the full month of July will not be released until 9 August, recent figures suggest that inflation continues to gradually accelerate. In the first half of July, consumer prices added 0.32% over the previous period, which exceeded market expectations of a 0.22% increase. As a result, annual inflation rose to 3.5%. On a related note, as from the mid-July release, inflation will be calculated and published by the statistical institute (INEGI) instead of the Central Bank. The transition began several months ago with the full collaboration of both institutions and is not likely to bring any relevant change to the series.