MexECON Blog

October CPI Rises 4.0 Percent YOY

In a report from Banco de México yesterday, Mexico's October consumer price index (CPI) was up 4.0% from the same month one year earlier.  That marked a significant increase from the year-over-year gains of 3.7% in each of the previous two months, and it brought Mexican inflation to its highest rate since April.  The acceleration in October came in large part from rising prices for food and utilities.  Excluding the volatile food, energy, and administratively-determined prices, the October core CPI was up 3.6% year-over-year, just as it was in September.  In a sign that Mexican consumer prices may trend modestly lower again in the coming months, the October producer price index (PPI) was up just 3.3% year-over-year, matching its increase in the year to September. 

Comment:  Although the rebound in inflation during October bears watching, it is encouraging that core inflation was unchanged and producer inflation remains slower than consumer inflation.  In late summer, central bank chief Carstens said Mexican inflation should fall to 3.0% by the end of 2011, and nothing in today's report suggests that target will be missed.  If inflation remains well-behaved, the central bank will have more leeway to keep interest rates low in support of the country's current economic recovery.

Patrick Fearon, CFA
Vice President, Fund Management

                                Mexico's Consumer Price Index (CPI)
                                      Percent Change, Year-Over-Year
                                            Source:  Banco de México
CPI 1010

1 comment(s) for “October CPI Rises 4.0 Percent YOY”

  1. Gravatar of Genevieve Signoret
    Genevieve Signoret says:
    The consensus forecast for 2011 inflation is 3.7. Ours is 3.9%.

    Also, Patrick, I do see your graphs.

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