Mexico inflation quickens in March

: Agriculture
25/04/09

Mexico's consumer price index (CPI) quickened to an annual 3.8pc in March, with price spikes in beef, housing and tourism offsetting easing in energy and produce prices.

The index increased for a second consecutive month after accelerating from 3.77pc in February off a four-year low of 3.59pc in January. It nevertheless held for a seventh consecutive month within the central bank's long-term target range of 2pc to 4pc.

The result, reported by statistics agency Inegi Wednesday, was in line with the median estimate of analysts polled in Citi Research's 7 April survey.

Core inflation, which excludes volatile energy and food, slowed to an annual 3.64pc in March from 3.65pc the prior month.

Non-core inflation accelerated to 4.16pc from 4.08pc, driven by a 4.9pc gain in agricultural.

Annual inflation for the meat, egg and fish component of CPI slowed to 9pc in March from 10.53pc in February, as egg prices began to recover from bird flu contamination.

Energy inflation eased to an annual 2.72pc in March from 3.74pc in February and 6.34pc in January following an agreement between President Claudia Sheinbaum and gasoline dealers to cap low-grade fuel at Ps24 per liter ($4.49/gallon).

For the month, headline CPI ticked up by 0.31pc in March after a 0.28pc gain the prior month. Core prices were up by 0.43pc for the month, and non-core prices fell by 0.08pc from the prior month.

Beef was a big driver for the monthly uptick in inflation, with prices up by 3.26pc in March from the prior month.

Despite the higher headline rate, Mexican bank Banorte said the inflation trend remains mostly favorable with short-term climate conditions suggesting fruit and vegetable prices likely less volatile in coming months than the same time last year.

Banorte also noted stability in Mexico's core inflation, and expects the central bank to issue its third half-point cut of 2025 to its target interest rate 15 May, lowering the rate to 8.5pc from 9pc.

By James Young

By James Young

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