MexECON Blog

February CPI Up 4.8 Percent YOY

In a report last week, Banco de Mexico said the February consumer price index (CPI) was up 4.8% from the same month one year earlier.  That marked a modest acceleration from the increase of 4.5% in the year to January.  However, it was still more modest than the 5.4% rise posted in December.  The acceleration in February stemmed in large part from a big rise in the price of food products, which were up 7.4% on-year.  According to the report, the food products with the biggest price increases were onions, green tomatoes, melons, and mangoes.

Comment:  The acceleration in food inflation is consistent with the strong pricing we have seen in our portfolio companies.  Because Mexico's "core" inflation (which excludes certain volatile categories, such as fresh foods) is somewhat more subdued, and because of the continuing sense that Mexico's economic recovery is still fragile, the February inflation report is not likely to spur the central bank to raise interest rates quickly.

Patrick Fearon, CFA
Vice President, Fund Management

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