Mexico: Inflation stable at nine-month low in October
November 7, 2013
Consumer prices rose 0.48% in October over the previous month. The reading was above both the 0.38% increase observed in September and the 0.46% rise the market had expected. According to the statistical institute, the monthly increase was the result of higher prices for fresh food and vegetables. In addition, the October increase reflected the yearly elimination of the summer electricity subsidy.
Annual headline inflation was virtually unchanged in October at September's 3.4%, which is the lowest level since January. Annual core inflation was also unchanged, remaining at September's 2.5%.
In its October Inflation Report, the Central Bank indicated that it expects inflation to end this year near 3.5%. For 2014, the Bank expects inflation be around 3.5%, remaining above the long-term inflation target of 3.0% due the temporary effects of tax increases. LatinFocus Consensus Forecast panelists expect inflation to end the year at 3.6%, which is unchanged over last month's forecast. For next year, the panel sees year-end inflation at 3.7%, which is also unchanged over last month's Consensus.
Author: Ricardo Aceves, Senior Economist