Mexico’s inflation slows; central bank maintains restrictive stance

During the first half of July 2023, inflation in Mexico showed a slowdown, indicated by the National Consumer Price Index (NCPI)’s biweekly variation of 0.29%.

As a result, the annual headline inflation rate stood at 4.79%, marking the lowest figure since March 2021, as reported by Inegi.

This rate is slightly above the anticipated market consensus of 4.76%, but lower than the preceding fortnight’s rate of 4.93%.

Core inflation, which the Bank of Mexico (Banxico) monitors for monetary policy, also rose by 0.24% biweekly, with an annual rate of 6.76%.

This is the lowest core inflation since the first half of March 2022.

Within the core index, merchandise prices increased at an annual rate of 7.99%, while services prices rose 5.29%.

Non-core inflation, comprising energy and specific food prices, fell 0.97% annually.

This inflationary trend implies that Banxico will continue its restrictive monetary stance at its upcoming August meeting.

General inflation estimates for the year’s end have dropped to 4.66% from 4.80%, according to a Citibanamex Expectations Survey.

In the first half of July, the top ten products witnessing a price increase included avocado and air transportation, while LP domestic gas and eggs were among the ten products that observed a price decrease.

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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief