MexECON Blog

April Inflation Steady at 3.1 Percent

Mexico's April consumer price index (CPI) was up 3.1% from the same month one year earlier, matching its increase in March.  According to the report, April brought much higher prices for a number of food products, including chicken, chiles, and avocados.  Excluding the volatile categories of fresh foods, energy, and government-set prices, however, the April "core" CPI was up just 2.3%, cooling from a 2.4% increase in the year to March.

At the wholesale level, the April producer price index (PPI) was up 2.8% year-over-year, after increases of 2.6% in March and just 1.9% in February.

The report was released on Thursday by INEGI, the official statistics agency.

Comment:   Along with the recent improvement in the labor market, moderate inflation could help encourage stronger consumer spending in Mexico.  That would help offset some of the recent softness in exports, manufacturing, and construction.  Moderate inflation is probably also an encouraging sign for Banco de México.  Inflation continues to hover around the central bank's medium-term target of 3.0%.  Nevertheless, the central bank has warned that it may hike interest rates in the coming months in response to the likelihood of higher interest rates in the United States.

Patrick Fearon, CFA
Portfolio Manager

CPI 1504

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