Mexico: Inflation falls to four-month low in June
July 9, 2013
In June, consumer prices dropped 0.06% over the previous month. The print was above the 0.33% drop observed in May and broadly in line with market expectations. The subdued reading mainly reflects how lower non-core prices, particularly for agricultural products, offset higher core prices.
Owing to the subdued monthly reading, annual headline inflation fell to 4.1% in June from 4.6% in May. The reading represents the lowest level in four months. Meanwhile, annual average inflation remained stable at May's 4.2%. Annual core inflation inched down from 2.9% in May to 2.8% in June.
In its latest inflation report from May, the Central Bank expects 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 3.6%.
Author: Ricardo Aceves, Senior Economist