Mexico’s October inflation slowed for the ninth month in a row

Mexico’s inflation in October decelerated for the ninth month in a row and stood at 4.26 percent annualized.

From the 4.45% reported in September, according to data published by the National Institute of Statistics and Geography (Inegi).

Mexico’s inflation in October was slightly better than the 4.28 percent annual rate expected by analysts consulted by Citibanamex.

In addition, Mexico’s inflation in October was the lowest level since February 2021, but has been above the Bank of Mexico’s (Banxico) target range of 3 percent +/- one percentage point for 32 months.

Compared to the previous month, the National Consumer Price Index (NCPI) advanced 0.38 percent, its lowest advance in four months and below the 0.40 percent expected by the market.

Andres Abadia, chief economist for Latin America at Pantheon Macroeconomics, said Mexico’s October inflation figures reinforce his view that headline inflation will remain under control over the coming months.

“The lagged effect of the MXN (Mexican peso) rally during the first three quarters, weaker consumer spending and tight monetary policy will continue to put downward pressure on inflation,” Abadia said.

In the breakdown of the data, core inflation, which eliminates volatile energy and food prices, also decelerated for the ninth month in a row to 5.50 percent annualized in October, its lowest level in 24 months.

Mexico’s inflation in October: Food

Meanwhile, Mexico’s merchandise inflation in October was at 5.64%, making it the 11th month in a row of moderation and marking a downward trend, a situation that has not been observed in services, which accelerated for the second month in a row to 5.34% annual in October.

Meanwhile, non-core inflation reached 0.56% annualized in October, up from 0.60% in the previous month.

The prices of agricultural products reached 1.62% annualized, which suggests less pressure, since one month ago they registered an increase of 3.25%, and energy and tariffs authorized by the government reported for the seventh month in a row a negative inflation of 0.35%.

Of the products that fell the most in price were foodstuffs.

Tomato had a 14.46% monthly drop in October; orange, 11.91%; onion, 11.72%; and chicken, 4.05%.

In contrast, those that rose the most were electricity, with 19.23% monthly, due to the end of the warm season electricity tariff program in 18 cities in the country.

Domestic LP gas rose 3.42% and air transportation, 13.37%.

Also read: Gross Fixed Investment in Mexico with the Highest Growth Since 1993.