Mexico’s annual headline inflation rate ticked up in the first half of October, ending a streak of five consecutive 15-day periods during which it declined.
The headline rate was 4.69% in the first half of the month, national statistics agency INEGI reported Thursday, up from 4.50% in the second half of last month and 4.58% across September.
The rate was slightly above the 4.66% consensus forecast of analysts surveyed by Citibanamex.
Consumer prices rose 0.43% compared to the second half of last month, while the annual core inflation rate, which excludes volatile food and energy prices, declined to 3.87% from 3.91% across September.
The latest inflation data comes almost a month after the Bank of Mexico (Banxico) lowered its key interest rate by 25 basis points to 10.50%.
The central bank has cut its benchmark rate by 25 basis points on three occasions this year even though headline inflation remained above its 3% target.
All of more than 30 banks, brokerages and research organizations surveyed by Citibanamex this week predicted that Banxico will make an additional 25-basis point cut to its key interest rate in November. The bank’s board will hold a monetary policy meeting on Nov. 14.
Inflation for fresh food nears 10%
INEGI reported that the annual inflation rate for agricultural products — fruit, vegetables and meat — was 9.66% in the first half of October, up from 6.76% across September.
Fruit and vegetables were 12.81% more expensive than a year earlier, while the cost of meat rose 6.26% annually.
Annual inflation for services was 5.03% in the first half of October, while energy prices, including those for electricity and gasoline, rose 4.69%.
Processed food, beverages and tobacco were 3.83% more expensive than in the first half of October 2023, while the cost of non-food goods rose 1.74%.
Electricity prices surge as summer subsidies end
INEGI reported that electricity prices increased 18.07% in the first half of October compared to the second half of September.
The cause of the sharp increase was the end of the summertime electricity subsidies program in various cities including Mérida, Monterrey, Acapulco, Campeche and Cancún.
Other need-to-know economic data
- The USD:MXN exchange rate was 19.84 shortly after 10:30 a.m. Mexico City time on Thursday.
- Mexico’s economy grew 1.5% annually in the first six months of 2024.
- The Mexican economy contracted on a month-over-month basis in September and grew just 0.5% in annual terms, according to preliminary data from INEGI.
- The International Monetary Fund is currently forecasting that the Mexican economy will grow 1.5% in 2024 and 1.3% in 2025.
With reports from El Financiero and El Economista
