The deceleration of inflation in Mexico has been on a downward trend for 8 consecutive months

The deceleration of inflation in Mexico has been on a downward trend for eight consecutive months. This is a sign of stability in the Mexican economy.

In September, the inflation deceleration in Mexico continued for the eighth consecutive month, reaching an annual rate of 4.45%.

In August, inflation was at 4.64%, according to data published on Monday by the National Institute of Statistics and Geography (Inegi).

This inflation figure was slightly below the market consensus of 4.46% annual and marked its lowest level since February 2021.

However, inflation in Mexico has remained above the target range set by the Bank of Mexico (Banxico) of 3 percent plus or minus one percentage point for 31 months.

On the other hand, it also exceeded the 4.44 percent from the previous fortnight, ending a streak of nine fortnights with a downward trend.

Compared to the previous month, the National Consumer Price Index (INPC) increased by 0.44 percent, its smallest increase in three months.

This was slightly below the 0.45 percent expected by analysts consulted by Citibanamex.

The deceleration of inflation in Mexico

Some institutions have revised their inflation forecasts upwards for the year-end due to factors that could exert pressure in the coming months, such as the resurgence of crude oil prices, strong consumer demand, a robust labor market, and persistent inflation in services.

One significant aspect of the September data was the core inflation, which excludes volatile prices of energy and food.

The deceleration of inflation in Mexico includes this component, as it decelerated for the eighth consecutive month to reach 5.76% annually in September, down from 6.08 percent in August.

The September core inflation figure was the lowest since November 2021, but slightly above the market’s 5.75 percent annual estimate.

However, it was observed that while inflation in goods moderated for the tenth consecutive month, reaching 6.20 percent annually in September, services increased to 5.23 percent from the previous 5.15 percent, mainly due to tuition fees.

Meanwhile, non-core inflation accelerated to 0.60 percent annually in September, up from 0.37 percent in August, marking the highest level in the last four months, although it did not reach the 0.73 percent estimated by analysts.

The prices of agricultural products moderated after two months of increase, settling at 3.25 percent annually.

Energy and government-authorized tariff areas recorded their sixth month of deflation, with a rate of 1.71 percent annually in September.

The market was anticipating data on energy prices, which internationally have shown pressures that may have been reflected in that month.

In particular, the price of lemons increased by 33.79 percent in September compared to the previous month, while tomatoes rose by 10.28 percent, and eggs by 5.43 percent.

However, there was a decrease in the price of oranges, which dropped by 10.86 percent, and avocados by 8.59 percent.

While this was happening in some consumer products, other areas, such as professional services, decreased by 14.61 percent monthly in September.

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