Inflation in Mexico accelerated to 3.8% in November
Inflation in Mexico accelerated to 3.8% year-on-year in November, driven by higher prices for fruits and vegetables and rising core inflation.
The consumer price index (CPI) increased from 3.57% in October, the Inegi statistical agency reported on Tuesday, after accelerating to 3.76%. In September, from 3.51% in July, which was the lowest annual inflation rate since December 2020.
Core inflation, which excludes volatile food and energy prices, accelerated to 4.43% from 4.28% in October. This marked the seventh month that the level of 4%, the upper limit of the central bank's inflation target range, was exceeded.
Regarding core inflation, consumer goods inflation accelerated to 4.37% in November from 4.12% in October, while service price growth accelerated to 4.49% in November from 4.44% in the previous month.
The three biggest factors affecting the consumer price index in November, according to Inegi, were electricity tariffs, due to the end of seasonal subsidies, public transport fares, and tomato prices.
Non-core inflation accelerated in November to 1.73% from 1.18% in October. Prices for agricultural products, especially fruits and vegetables, have decreased this year due to favorable climatic conditions. But there have been changes.
And although the annual inflation of prices for fruits and vegetables decreased by 7.79% in November, this is comparable to the annual decrease of 10.27% in the previous month. According to Banorte, the segment is experiencing an increase in inflationary pressures caused by heavy rainfall in several states in October and nationwide roadblocks in November organized by truck associations.
Energy prices dropped to 0.54% from 1.07% in October, while Banort noted "remarkable stability" in the segment for most countries. by 2025," which is facilitated by government actions and favorable international indicators. However, the latter have been mixed lately: gasoline prices have improved, but prices for both natural and liquefied gas have increased."
Final and core inflation for November turned out to be surprisingly high, exceeding forecasts of 3.76% for the headline in the newspaper and 4.36% for core inflation in the Banorte.
Banorte noted that according to the latest data, general and core inflation at the end of the year exceeded the central bank's forecasts by 3.5% and 4.1%, respectively. However, Banorte expects the central bank to cut its target interest rate by a quarter point to 7.00% from 7.25% at the December 18 meeting, citing dovish remarks in the central bank's quarterly presentation.