Mexico's inflation eases further in September, still above bank target
Reuters
Published Oct 09, 2023 09:06AM ET
Updated Oct 09, 2023 09:26AM ET
(Reuters) -Mexico's annual inflation eased in September for the eighth consecutive month and stood at 4.45%, still above the central bank's target, data on Monday showed, supporting forecasts the bank will keep its key interest rate at its current level.
Annual core inflation in September, considered a better gauge of price trends because it excludes some highly volatile items, was 5.76%, in line with market forecasts and the lowest in almost two years, data from statistics agency INEGI showed.
However, inflation figures continue to exceed the Bank of Mexico's target of 3% plus or minus one percentage point.
The Bank of Mexico at the end of September, voted to keep the reference interest rate at a historic high of 11.25% for the fourth time in a row, citing a complicated and uncertain inflationary outlook.
Jason Tuvey, Deputy Chief Emerging Markets Economist at Capital Economics, said Banxico's concerns about persistent inflation were reinforced by the fresh rise in services prices.
"This only reinforces that an easing cycle will not begin until early next year and that rates will come down slower than the consensus anticipates," Tuvey added.
Consumer prices rose 0.44% in September from August, according to non-seasonally adjusted figures, above the expected 0.45%.
The closely watched core price index, which strips out some volatile food and energy prices, rose 0.36% during the month.
Overall, the inflation picture is continuing to improve, said Pantheon Macroeconomics' Chief Latin America Economist Andres Abadia.
This was "thanks to the lagged effect of tighter financial conditions, the impressive MXN rebound in recent months and lower raw-material prices," he added.
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Written By: Reuters
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