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Mexico's Prices Rise Less-Than-Expected 0.40% in First Half of September
Mexico’s consumer prices increased less than expected in the first half of September as costs fell for produce and processed foods.
Prices rose 0.40 percent in the first 15 days of the month, the central bank said on its website. Economists expected a 0.45 percent rate, according to the median estimate of 15 analysts surveyed by Bloomberg. Annual inflation was 3.65 percent in the first half of the month, the bank said.
Today’s reports shows that inflation in Latin America’s second-biggest economy is under control and that policy makers have no need to increase the benchmark interest rate, said Pedro Tuesta, an economist for Latin America at 4Cast Inc.
“It’s in line with what the central bank has been saying, that inflation will be below forecasts,” Tuesta said in a telephone interview. “It has all the signs to support the bank’s view that they don’t need to hike.”
The central bank won’t raise borrowing costs until September 2011, according to a Sept. 21 survey of economists by Citigroup Inc.’s local Banamex unit. Economists pushed back their forecast from a previous estimate of July 2011.
Inflation in Mexico has remained within the bank’s forecast in the second and third quarters. Consumer prices rose 3.68 percent in August compared with a year earlier, a slower rate than the range of 4.75 percent to 5.25 percent forecast by the bank for the third quarter.
Core inflation rose 0.34 percent in the first half of September, the bank said.
Banco de Mexico on July 28 kept its inflation forecasts unchanged through next year, as bank Governor Agustin Carstens said policy makers would wait for more economic data before making any changes to their predictions.
Economic growth will be 4 percent to 5 percent, the central bank says.
The peso weakened 0.1 percent to 12.6432 per dollar at 10:43 a.m. New York time from 12.6287 yesterday.
To contact the reporter on this story: Jens Erik Gould in Mexico City at jgould9@bloomberg.net.
To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net
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