Mexico City – Inflation in Mexico showed signs of easing in the first half of October, as higher electricity costs were offset by lower prices for fresh produce. According to the National Statistics Institute, the consumer price index rose 0.24% during this period, bringing the annual rate down to 4.27% from 4.45% at the end of September.
Core CPI, which removes energy and agricultural prices from the equation, increased by 0.24% in the first two weeks of October, resulting in a year-on-year rise of 5.54%, compared to 5.76% in September.
Electricity costs were the primary driver behind noncore inflation, surging by 19% since September due to the removal of summertime subsidies on residential rates in several cities. However, this was partly offset by a decline in fresh produce prices.
Despite the gradual easing of inflation throughout the year, the Bank of Mexico has reiterated its commitment to maintaining the current overnight interest-rate target at 11.25% for an extended period. As a result, any expectations for interest rate cuts this year have been put to rest.
The central bank anticipates that inflation will continue to exceed its 3% target until the second quarter of 2025.
