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Mexico

Mexico annual inflation rises to 3.75% in October, above forecasts

Higher-than-expected price pressures put the central bank's recent rate cut under scrutiny, a matter for investors and policymakers tracking Mexican monetary policy.

Photo: Capital Times

What happened

Mexico's annual inflation rose to 3.75% in October from 3.45% in September, the third straight monthly increase, according to INEGI data published November 9. Capital Times The reading came in above the median estimate of 3.65% in a Bloomberg survey of 23 economists. MacroHerald Core inflation, which strips out volatile food and energy prices, climbed to 3.80% year on year in October, above the 3.78% forecast and September's 3.75% reading. MacroHerald Core prices rose for the first time in nine months, as the end of summer power subsidies lifted electricity bills. Capital Times

Around it

Air transport prices jumped 26.36% during the month, zucchini rose 23.22%, and electricity prices climbed 18.51%. MacroHerald Services prices rose 4.32% from a year earlier. Capital Times The data landed days after Banxico cut its overnight rate by 25 basis points to 6.25% on November 5 in a 3-2 vote, and the central bank said it expects to hold that level for a prolonged period. Capital Times The decision to cut rates despite persistent price pressures is expected to face intensified scrutiny now that both headline and core measures have come in above forecast. MacroHerald

Sources

  1. MacroHeraldMexico inflation rises to 3.75% in October, tops forecasts
  2. Capital TimesMexico Inflation Climbs to 3.75% in October, Days After Banxico Cut Rates to 6.25%

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