Reuters.- Year-on-year inflation continued to moderate in August, although it remained well above the official target, amid a strong advance in the core index, which strengthens expectations that the Bank of Mexico (Banxico) would raise its key rate again at the end of of month.
The general consumer price index (INPC) rose 5.59%, its lowest level since March, according to figures released this Thursday by the National Institute of Statistics and Geography (Inegi). Analysts projected it to decline to 5.60% from 5.81% in July.
On the other hand, core inflation, which has become a growing concern for Banxico, increased 4.78%, a level not seen since December 2017.
The INPC has been slowing down since April, when it reached 6.08%, its highest level in more than three years, but it is still far from the central bank’s 3% target, which in the past increased for the second consecutive time referential interest rate.
The next monetary policy decision is scheduled for September 30 and a large part of the market anticipates a new increase in the cost of loans and that inflation will continue to be pressured in the coming months.
In August alone, consumer prices grew 0.19%, while the core index rose 0.43%.
In the month, the products whose rising prices had the greatest impact on inflation were serrano chili, avocado and onion; Meanwhile, the products that fell in price and counteracted the shortage were LP gas, air transport and packaged tourist services.