Inflation in Mexico was 6% in September, double the official goal

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The National Consumer Price Index (INPC) stood at 6.00%, its highest level since April.

Year-on-year inflation in Mexico accelerated in September to far exceed the official target again, fueling expectations that the central bank would raise its benchmark interest rate again next month.

The National Consumer Price Index (INPC) stood at 6.00%, its highest level since April, according to figures released on Thursday by the National Institute of Statistics and Geography (Inegi). Analysts projected it to accelerate to 5.99% from 5.59% in August.

Meanwhile, core inflation rose to 4.92%, a level not seen since August 2017.

The Bank of Mexico (Banxico) raised the benchmark rate for the third consecutive time last week by 25 basis points, to 4.75%. The monetary entity also updated expectations for the consumer price index and projected that it would reach its objective in the third quarter of 2023.

Banxico Deputy Governor Jonathan Heath told Reuters on Monday that the key rate’s upward cycle is not over yet and one or two hikes are likely, though any decision will depend on available data.

The next monetary policy announcement, the penultimate of a total of eight for the year, is scheduled for November 11. Banxico has a permanent inflation target of 3% plus / minus one percentage point.

In September alone, consumer prices grew 0.62%, while the underlying index rose 0.46%, said Inegi.

The increase in the INPC was driven in the month by price increases in domestic LP gas and some agricultural products.

Source: forbes.com.mx

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