Mexico’s annual inflation has accelerated a lot more than expected in the first half of February, putting additional pressure on the central bank to continue increasing its interest rate despite signs of a stalled economic recovery.
Consumer prices rose 7.22% in the first two weeks of the month versus a year earlier, the national statistics institute reported on Thursday morning. That compares to the 7.17% median estimate of economists surveyed by Bloomberg and 7.01% inflation in the last two weeks of January.
Core inflation, which excludes volatile items like fuel and is closely watched in Mexico, quickened to 0.43%, above the 0.35% reading in the prior two-week period and the 0.33% increase expected by analysts. Faster core inflation had been a sign of trouble in the past months, suggesting that Mexico’s price pressures were more permanent than some economists had anticipated.
“Today’s readouts are not good. They show that upward pressures on core inflation are larger than we expected,” said Jessica Roldan, an economist at Casa de Bolsa Finamex. “Renewed pressures on energy prices deteriorate the outlook even further.”
Cooking gas costs, gasoline, and car prices were the biggest contributors to the early February inflation data. On a yearly basis, core inflation in the first two weeks of the month reached 6.52%, its highest level in more than 20 years.
Source: El Economista