Mexico Inflation Rate Drops to 2-1/2-Year Low

Mexico's annual inflation rate fell to 3.78 percent in July 2019 from 3.95 percent in the previous month, slightly below market expectations of 3.79 percent. That was the lowest rate since December 2016 mainly due to a slowdown in energy inflation.

Year-on-year, energy prices rose 0.76 percent in July, slower than a 2.51 percent advance in June. Also, food, beverages & tobacco were up 4.87 percent, compared to 5.01 percent in the previous month; and non-food goods prices rose 2.78 percent, after a 2.84 percent increase.

Meanwhile, agriculture goods inflation accelerated to 6.33 percent from 6.23 percent on the back of livestock goods (7.06 percent vs 4.89 percent) while fruits and vegetables prices rose at softer rate (5.61 percent vs 9.32 percent). Within services (3.79 percent vs 3.75 percent), main upward pressure came from housing (2.86 percent vs 2.84 percent); education (4.91 percent vs 4.86 percent), and other services (4.40 percent vs 4.39 percent).

On a monthly basis, consumer prices increased 0.38 percent in July, after a 0.06 percent advance in June and slightly below market forecasts of 0.39 percent. Agriculture goods jumped 2 percent (vs -0.18 percent in June) and service inflation was unchanged at 0.38 percent; while goods prices rose at softer 0.15 percent (vs 0.23 percent in June) and energy costs fell 0.19 percent (vs -1.55 percent in June)

The core index, which strips out some volatile food and energy prices increased by 0.26 percent from a month earlier (vs 0.30 percent in June) and by 3.82 percent over the prior year (vs 3.85 percent in June).

Mexico Inflation Rate Drops to 2-1/2-Year Low

INEGI | Joana Ferreira |
8/8/2019 11:40:12 AM