Mexico’s inflation hits new low in December

Mexico’s annual inflation cooled to a fresh record low in early December, showing little impact from a sharply weaker peso currency after the central bank hiked rates for the first time in seven years.


Do you want to support independent news publishers that serve local communities? Click here to learn how you can help this news publication.

Inflation in the 12 months through mid-December slowed to 2.00 percent, the national statistics institute said on Wednesday, well below the 2.21 percent reached in the full month of November, its seventh consecutive record low.

A poll of analysts by Reuters forecast a rate of 2.05 percent.

Mexico’s central bank has said it expects annual inflation to end the year around 2 percent, before climbing back to around the bank’s 3 percent target next year. But sluggish growth is containing price pressures in Latin America’s No. 2 economy.

Mexico’s central bank hiked borrowing costs last week off an all-time low in a bid to stem further weakening in the peso after the Federal Reserve lifted U.S. interest rates the day before.

Mexico’s peso, which had tumbled to a series of unprecedented lows this year on concerns of higher U.S. borrowing costs, has continued slipping since the rate hikes last week.

But the latest data underscored the so-far limited impact of peso weakness. While the depreciation of the currency has made imported goods more expensive, it has been offset by price drops, such as a big decrease in telecommunications costs.

The data showed that consumer prices rose by 0.26 percent in the first half of December. The analysts’ poll had forecast a 0.28 percent increase.

The core price index, which strips out some volatile food and energy prices rose by 0.27, above expectations for a 0.23 increase. That took the 12-month core inflation rate to 2.39 percent, in line with expectations for a 2.39 percent rise.

(Reporting by Alexandra Alper Editing by W Simon)


Do you want to support independent news publishers that serve local communities? Click here to learn how you can help this news publication.

Compare Listings

Title Price Status Type Area Purpose Bedrooms Bathrooms