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
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
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