Inflation in Mexico accelerated during the first half of April to its highest level in more than three years and thereby doubled the Bank of Mexico’s target, mainly driven by increases in fuel prices.
Mexico’s consumer price index registered an increase of 6.05% at an annual rate, the National Institute of Statistics and Geography (Inegi) reported on Thursday.
“This was expected, this should not be a problem. What is happening is something that we had already anticipated, this is nothing more than a mirror of the sharp fall that we saw in March and April 2020, ”explained Carlos Serrano, BBVA’s chief economist.
The figure is above the 5.84% projected in a Reuters poll, and it is the highest record of headline inflation since the second half of December 2017.
Core inflation was 4.13% annually, above the 4.08% expected by the market.
BBVA’s Chief Economist said at a conference on Wednesday that as services are opened and bottlenecks in food are eliminated, inflation will once again have a “more normal” behavior.
“We are going to see another peak in inflation in November and December, the mirror of the fall that we saw in November and December 2020,” he predicted.
The data published this Thursday reinforces expectations that the Bank of Mexico will keep the benchmark interest rate unchanged at its current level of 4% in its next announcement on May 13.
The central bank kept the benchmark interest rate unchanged in March at 4%, citing an increase in expectations for inflation at the end of the year.
The agency has a permanent inflation target of 3% +/- one percentage point. Only in the first half of April, consumer prices grew 0.06%, according to INEGI, while the underlying index advanced 0.18%.
The items that increased their prices the most during the first half of the fourth month were energy, followed by food, beverages and tobacco, and non-food merchandise.